On March 27, 2020, a pair of New York State Assembly members introduced a bill that was aimed at requiring insurance carriers that issued a loss of use or business interruption policy to retroactively cover the losses resulting from Covid-19. The proposed bill stated that all such policies “shall be construed to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the coronavirus disease 2019 (COVID-19) pandemic.” The proposed bill seemed directly aimed at any position that Covid-19 was not a physical loss, and was indirectly aimed at any exclusion for infectious disease. While the bill jacket mentioned exclusions for infectious disease, the actual proposed bill simply attempted to force BI and loss of use policies to include Covid-19 losses as “covered perils”. The initial bill was also limited to businesses that employed less than 100 full time employees.
A recent amendment to the proposed bill makes it now clear that the bill is also aimed at making “null and void” any exclusion “based on a virus, bacterium, or other microorganism that causes disease, illness, or physical distress or that is capable of causing disease illness, or physical distress.” The amended bill now also increases the number of employees a business may have to less than 250 full time employees, thus significantly increasing the number of insureds that could take advantage of this increased coverage. Finally, the amendment also declares that any policy that might expire during the Covid-19 state of emergency is subject to automatic renewal at the current rates.
While some might think that the passage of such a bill that significantly changes the landscape of coverage and scope of liability for carriers is a long shot, the recent passage of the New York Child Victim’s Act shows that such dramatic changes are not beyond New York State’s lawmakers.
Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.