On Tuesday, March 10, the New York Department of Financial Services (NYDFS) issued two broad communications to the insurance industry. First, instructing all property and casualty insurers providing business interruption in NY to send an explanation of benefits to policyholders, and second, asking "all regulated insurance entities" for extensive reports on their financial and operational preparedness for the effects of COVID-19.

A letter issued by the NYDFS regarding the "explanation of benefits" for business interruption coverage announcement cited the "potential impact of COVID-19 on business losses," and instructed all property and casualty insurers providing business interruption and related coverage in the state to send a "clear and concise explanation of benefits" to all commercial policyholders.

The notification to policyholders should include all relevant information, including without limitation:

• A description of the commercial property or related coverage the insured holds.
• Whether the policy in place provides "business interruption coverage." If so, the insurer should provide the "covered perils" under the policy and indicate if there is a requirement for "physical damage or loss," explain whether pandemic contamination may constitute "physical damage or loss" and describe the type of damage or loss sufficient for coverage under the policy.
• Whether the policy includes "contingent business interruption" coverage, and a list of covered perils under the policy, and indicate if there is a requirement for "physical damage or loss," explain whether pandemic contamination may constitute "physical damage or loss" and describe the type of damage or loss sufficient for coverage under the policy.
• Whether the policy includes "supply chain" coverage, and if that coverage is limited to named products or services from a named supplier, and indicate if there is a requirement for "physical damage or loss," explain whether pandemic contamination may constitute "physical damage or loss" and describe the type of damage or loss sufficient for coverage under the policy.
• Required waiting periods under the policy.

The insurer must also provide NYDFS with a copy of the explanation of benefits, along with specific statistical information about the amount of business written, all due by March 18.