N.Y. Bill Would Expand Civil Authority Coverage
NU Online News Service, June 6, 10:30 a.m. EDT?New York Gov. George Pataki has proposed legislation to expand the scope of civil-authority business interruption coverage.
The proposal would eliminate physical damage to property as a requirement for the triggering of coverage.
According to a statement by the governor's office, the measure is designed to provide business interruption coverage in situations such as those caused by the closing of roads due to snowstorms and ice falling from buildings, which may cause loss of income for businesses whose customers cannot reach them,.
"Civil authority coverage under business interruption has always required physical damage to property, other than the insured's property," noted Diana Reitz, a coverage expert with National Underwriter Company's FC&S Bulletins. If the insured's property is damaged, the claim would come under regular business interruption, not the civil authority extension, she added.
"Establishing a new type of coverage without a physical damage requirement at all, that seems to me to be a risk that would be hard for insurers to quantify," Ms. Reitz said.
"The civil authority insurance legislation will provide New York businesses with access to additional insurance coverage options to better suit their needs in times of an emergency," Gov. Pataki said in a statement.
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