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.
Bradford J. Lachut, Esq.
Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.