Proposal in NY Could Require Business Interruption Coverage for COVID-19 Pandemic
A bill proposed in the New York State Legislature might have a far-reaching impact for insurers. On March 27, 2020, the New York State Legislature introduced a bill that would require every policy of insurance insuring against loss or damage to property to include coverage for business interruption during the COVID-19 pandemic. The proposed bill seems to be an attempt to force insurers that provide loss of business coverage to indemnify the insured for COVID-19 related closures and losses. Bill A10226 provides in relevant part:
- Every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption, shall be construed to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the coronavirus disease 2019 (COVID-19) pandemic.
The bill indicates that coverage is subject to policy limits, and that it only applies to policies issued to insureds with less than 100 employees. Given the fact that almost every business in New York is impacted by COVID-19, this proposed bill might have an alarming impact for insurers.
Thanks to John Lang for contributing to this post. Please email Heather Aquino with any questions.