In recognition of the financial impact the global COVID-19 pandemic has had on businesses, Assembly Democrats Roy Freiman and Gary Schaer sponsor legislation that would authorize certain insurers to offer coverage for global virus transmission and/or a pandemic.
Under the bill (A-4551), insurers that offer policies that protect against loss or damage to property – including business interruption – would be authorized to offer optional additional insurance coverage for a global pandemic or virus transmission.
Business interruption insurance covers the profits a business would have earned if not for a disaster resulting in a loss of revenue. This type of coverage may also cover additional costs associated with operating during and recovering after the disaster.
Upon the legislation being advanced by the Assembly Financial Institutions and Insurance Committee on Wednesday, Assembly sponsors Freiman (D-Somerset, Mercer, Middlesex, Hunterdon) and Schaer (D-Bergen, Passaic) issued the following joint statement:
“Over the past year, we have seen just how significantly a business can be affected by a global pandemic with the untimely permanent closure of valued businesses throughout our state. Limited staff availability, temporary shut-downs, supply chain interruptions and necessary safety precautions that may take place during a pandemic can all ultimately impact a company’s revenue.
“After the challenges the COVID-19 pandemic has presented our business community, it is prudent for us to find ways to mitigate these losses in the event of any future pandemics. Allowing businesses to seek out insurance coverage for business interruption caused by global virus transmission will help accomplish that going forward.”
The bill now heads to the Assembly Speaker for further consideration.