Feb 16, 2021
Business interruption bill reported out of committee
Legislation that would require insurers to disclose whether certain policies have business interruption pandemic coverage passed the Senate Commerce Committee on Feb. 11, 2021. The bill (A-4805), which has passed the New Jersey Assembly unanimously, would require an authorized insurer to provide a disclosure stating whether the policy provides coverage for global virus transmission or pandemic coverage prior to issuing a new policy or renewing an existing policy.
Additionally, the Department of Banking and Insurance would be required to publish a one-page summary on its website. The summary would include:
- common insurance clauses concerning coverage for the loss of use;
- occupancy of a commercial property; and
- business interruption that may be used in a commercial insurance policy.
Additionally, the summary would be required to include the following:
- information concerning common coverage triggers;
- examples of perils typically covered;
- a summary of common exclusions; and
- a statement that “Your policy may not cover pandemics or viruses.”
According to the legislation, the DOBI would be required to publish this summary within 90 days of bill becoming a law.
This legislation was amended in committee to apply only to authorized insurers. In addition, a sunset provision was added whereby this act would expire 30 days after the effective date of any similar federal legislation.