AS COVID-19 spreads throughout the United States, individual states are taking various steps to protect citizens from the spread of the virus. Some governors have closed schools, restaurants, and bars and others are contemplating doing the same. Now some states are adding to the closures gyms, fitness centers, movie theaters, and others. Many states are requiring people to not congregate in groups of more than fifty people, in order to limit the chances of passing the virus to others. 

Whenever there is a catastrophe of some sort, people naturally look to insurance. One of the significant coverages for commercial property policies is business income/interruption, which provides coverage for loss of business income due to damage to the insured property or to neighboring property that causes local authorities to restrict access to the insured property. With businesses being told to close, business owners are naturally turning to their insurance coverage. Unfortunately, they are finding out that such coverage applies only when property damage has occurred, either to their property or neighboring property, even if the closure is the result of actions of civil authority. This puts an extensive hardship on many businesses, particularly smaller businesses. 

The state of New Jersey is discussing a bill today that would require all insurers whose policies provide coverage against loss or damage to property, and includes business interruption coverage, to consider interruption due to global virus transmission or pandemic as a covered cause of loss. This is specific to the Public Health Emergency and State of Emergency declared by the Governor in the March 9, 2020 executive order. Coverage is to be provided for any loss of business or business interruption for the duration of the state of emergency, and applies to policies for insureds with less than 100 eligible employees. Eligible employees are those working more than 25 hours a week. Smaller businesses are at great risk during this time because they do not always have the available resources and cash flow to survive during a long-term shutdown.