Letter to California Insurance Commissioner Ricardo Lara

March 19, 2020


The Honorable Ricardo Lara

California State Insurance Commissioner

300 Capitol Mall, 17th Floor

Sacramento CA 95814


Re:  Business Disruption In COVID-19 Crisis

Dear Commissioner Lara:

As you know, businesses throughout California are being devastated by the impact of the COVID-19 crisis.  In Los Angeles and many other parts of the state, entire categories of businesses such as bars, restaurants, gyms and bowling alleys are being closed or severely curtailed by executive orders.  Other small businesses have lost a massive percentage of normal sales due to potential customers following social distancing and “shelter in place” protocols.  In my district and around Los Angeles, many small businesses are at immediate and grave risk of permanent closure. 

As a result, many small businesses have begun making claims on the business disruption insurance.  I am informed that these claims are being summarily rejected by all carriers based on an exclusion in the standard policy language for closure due to viruses.  However, it is at least arguable that these losses frequently are not due to the virus, but due to government actions or marketplace disruptions only indirectly resulting from the fear of the virus.

Especially at a time of such a calamitous crisis for California’s economy and the businesses and employees who are being so badly hurt by this situation, it is outrageous that these carriers appear to be acting in bad faith by refusing even to consider these claims on their individual merits.

As the Chair of The Los Angeles City Council’s Jobs Creation Committee, I request that your office investigate this urgent situation with haste.  If there is any basis by which you can ensure fairer treatment to our small business community, it would make a huge difference, and perhaps even the difference critical to survival, for thousands of businesses and the working people whose jobs depend on them.

Thank you in advance for your consideration and for any help that you can offer to struggling businesses in this time of crisis.


Very truly yours,


Los Angeles City Councilmember


cc:        Mayor Eric Garcetti

            Senator Susan Rubio

            Senator Brian W. Jones

            Assembly Member Tom Daly

            Assembly Member Chad Mayes