The New Jersey Assembly is currently considering legislation that would authorize property insurers offering coverage for loss of use and occupancy and business interruption to provide their insureds a rider covering global virus transmission or pandemic. The bill provides that the Commissioner of Banking and Insurance must review and approve, on an expedited basis, any such rider offered by an insurer. If enacted, the bill would take immediate effect. The comments to the bill note that the Insurance Services Office has recently developed a form of rider that offers coverage for global virus transmission or pandemic but, as of the date of the bill’s issuance, the form has not yet been approved by any state.

The enactment of this legislation may change the business interruption insurance landscape in favor of insureds—especially if other states follow New Jersey’s lead. Generally, policies covering business interruption do not cover global virus transmission or pandemic related losses. The introduction of the policy rider offers insureds an option for coverage that was not previously available.

Identical legislation is working its way through the New Jersey Senate.

The text of both bills can be found at: A4551 and S3280