We've been writing about COVID-19 and its impact since early last year. One of the largest issues has been the lockdown of businesses to prevent the spread of COVID-19, and the subsequent questions as to whether or not the business's business interruption coverage should provide any coverage for the period of time when the business was shut down. This question has led to many discussions and lawsuits throughout the country.
Most courts have found for the insurer, that COVID-19 does not physically damage property and that the coverage applies only when the property has been physically damaged and that damage prevents the business from operating. Since this is such a large issue, the state of New Jersey has passed a bill that requires insurers to disclose whether a business interruption policy provides coverage for a pandemic.
The bill requires the insurer to disclose to any potential buyer of coverage or policyholder seeking renewal of existing coverage for property damage that includes business interruption, to disclose whether that coverage applies to global virus transmission or pandemic coverage. The manner of such notice is to be determined by the insurance commissioner.
Policyholders with active policies are to be notified within thirty days of the enactment of the bill by written statement delivered via mail or electronic means whether such coverage applies or not. A copy of the bill may be found here.