Business interruption bill passes N.J. assembly

Legislation requiring certain insurers to disclose to current and future policyholders whether their business interruption policies cover pandemics was approved by the New Jersey Assembly.

The bill was originally introduced in October 2020 and passed by both the Senate and Assembly on March 25th and awaits signing by the governor.

Bill A-4805 requires insurers that issue business interruption policies in the state to disclose whether the policy provides coverage for “global virus transmission or pandemic coverage” to any potential purchaser or policyholder seeking renewal. The bill requires the disclosure to be in a “form and manner prescribed by the Commissioner of Banking and Insurance” and requires insurers to notify current policyholders with business interruption insurance whether the policy provides coverage for global virus transmission or pandemic coverage within 30 days of the enactment of the bill.

Notification must be a written statement delivered by mail or electronic means.

This move out of New Jersey resembles TRIA. Several other states are also considering bills seeking to create business interruption coverage, including New York, Oregon, Pennsylvania, and Rhode Island.

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