Coronavirus Update: Are You Covered for Business Interruption? Is Your Boss?

March 23, 2020 by  
Filed under Blog, Uncategorized, Website

Progress Is Being Made to Clarify Coverage for Business Interruption for Coronavirus.

 

We started getting calls today from business owners asking if they were covered due to the shut down due to the Coronavirus. We, as usual, asked for the policy in order to check the language.

Additionally, we received a letter from our own insurance company that was mandated out of the New York Department of Financial Services requiring all companies writing commercial insurance to explain the coverage or lack thereof.

The New Jersey State Assembly is working on Bill A3844 which will require insurance companies to construe coverage to include Covid-19, or Coronavirus related closures. They will be considering contamination to be direct physical damage.

Our own coverage as mentioned earlier affords coverage for Civil Authority if due to action by said authority prevents access to our Main or Dependent Properties. Of course, there will be additional language to sort through and we need a topic for tomorrow.

Until then we transposed a copy of the New Jersey Assembly bill for you. Do not hesitate to contact us with any questions.

Will Your Business be covered for lost revenue because of virus shut down

Will New Jersey Require Insurance Companies to Cover Business Interruption Due to Coronavirus ( Covid-19)

 

Text of New Jersey Assembly Bill A3844:

ASSEMBLY, No. 3844

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED MARCH 16, 2020

 

 

Sponsored by:

Assemblyman  ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblyman  LOUIS D. GREENWALD

District 6 (Burlington and Camden)

Assemblywoman  ANNETTE CHAPARRO

District 33 (Hudson)

 

Co-Sponsored by:

Assemblywomen Reynolds-Jackson, McKnight, Lopez, Assemblymen Wimberly, Mazzeo, Chiaravalloti, Assemblywoman Jasey, Assemblyman Mejia, Assemblywomen Jimenez, Swain and Assemblyman Zwicker

 

 

 

 

SYNOPSIS

Concerns business interruption insurance during coronavirus disease 2019 state of emergency.

 

CURRENT VERSION OF TEXT

As introduced.

 

An Act concerning certain covered perils under business interruption insurance and supplementing Title 17 of the Revised Statutes.

 

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

  1. a.  Notwithstanding the provisions of any other law, rule or regulation to the contrary, every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption in force in this State on the effective date of this act, shall be construed to include among the covered perils under that policy, coverage for business interruption due to global virus transmission or pandemic, as provided in the  Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 concerning the coronavirus disease 2019 pandemic.
  2. The coverage required by this section shall indemnify the insured, subject to the limits under the policy, for any loss of business or business interruption for the duration of that declared State of Emergency.
  3. This section shall apply to policies issued to insureds with less than 100 eligible employees, in the State of New Jersey, and in force on the effective date of this act. “Eligible employee” means a full-time employee who works a normal work week of 25 or more hours.

 

  1. a.  An insurer which indemnifies an insured who has filed a claim pursuant to section 1 of this act may apply to the Commissioner of Banking and Insurance for relief and reimbursement by the commissioner from funds collected and made available for this purpose as provided in section 3 of this act.
  2. The commissioner shall establish procedures for the submission and qualification of claims by insurers which are eligible for reimbursement pursuant to this section.  The commissioner shall incorporate in these procedures such standards as are necessary to protect against the submission of fraudulent claims by insureds, and appropriate safeguards for insurers to employ in the review and payment of such claims.

 

  1. a.  In addition to the special purpose apportionment made pursuant to section 2 of P.L. 1995, c.156 (C.17:1C-20), the Commissioner of Banking and Insurance is authorized to impose upon, distribute among, and collect from the companies engaged in business pursuant to subtitle 3 of Title 17 of the Revised Statutes, such additional amounts as may be necessary to recover the  amounts paid to insurers pursuant to section 2 of this act.
  2. The additional special purpose apportionment authorized pursuant to subsection a. of this section shall be distributed in the proportion that the net written premiums received by each company subject to the apportionment authorized by this section for insurance written or renewed on risks in this State during the calendar year immediately preceding, bears to the sum total of all such net written premiums received by all companies writing that insurance or coverage within the State during that calendar year, as reported.  The commissioner shall adopt the same procedures and calculations as are provided in section 2 of P.L.1995, c.156 (C.17:1C-20) as appropriate to calculate the additional special purpose apportionment authorized by this section.
  3. For the purposes of this section, “net written premiums received” means gross direct premiums written, less return premiums thereon and dividends credited or paid to policyholders, as reported on the company’s annual financial statement.

 

  1. This act shall take effect immediately, shall be retroactive to March 9, 2020 and shall apply to insurance policies described in section 1 of this act and in force on that date.

 

 

STATEMENT

 

This bill provides a mechanism by which certain businesses that suffer losses due to interruption as a result of the coronavirus disease 2019 pandemic may recover those losses from their insurer if they had a policy of business interruption insurance in force on March 9, 2020, the date on which the Governor declared a Public Health Emergency and State of Emergency in Executive Order 103.  The bill would apply to businesses covered by such a policy with less than 100 eligible employees in the State of New Jersey.  “Eligible employee” is defined as a full-time employee who works a normal work week of 25 or more hours

The bill provides that every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption, in force on the date of the Executive Order, shall be construed to include among the covered perils under that policy coverage for business interruption due to global virus transmission or pandemic, as provided in the Governor’s  Executive Order.  The coverage provided would be subject to the limits under the policy and would indemnify the insured for losses incurred during the State of Emergency.

The bill then provides that an insurer which indemnifies an insured who has filed a claim pursuant to its provisions may apply to the Commissioner of Banking and Insurance for relief and reimbursement from funds collected and made available for this purpose as provided in the bill, pursuant to an additional special purpose assessment under the general scheme already established by law to recover the general expenses of the Department of Banking and Insurance as the regulator of the insurance industry in this State.  The commissioner shall establish procedures for the submission and qualification of claims by insurers which are eligible for reimbursement, incorporating such standards as are necessary to protect against the submission of fraudulent claims by insureds, and appropriate safeguards for insurers to employ in the review and payment of such claims.

Finally, the bill authorizes the commissioner to impose upon, distribute among, and collect from insurance companies, other than life and health insurance companies, the additional amounts as may be necessary to recover the amounts paid pursuant to the bill.  The additional special purpose apportionment authorized by the bill shall be distributed according to essentially the same procedures and calculations as are provided currently for the existing special purpose apportionment.

Industry sources have indicated that global virus transmission and pandemic are generally excluded from the list of covered perils under the existing standard business interruption insurance policy. The Insurance Services Office, ISO, has developed a rider to provide an insured with the option of purchasing such coverage, but to date, no states have yet approved the form.  This bill, then, is intended to hold harmless a certain portion of the business sector, which had the foresight to purchase business interruption insurance, for losses sustained as a result of the current health emergency, but for which no such coverage is currently offered.

Calling for Reinforcements on Business Interruption Claims

March 22, 2020 by  
Filed under Uncategorized

Employing  Experts Adjusting and in an Insurance Appraisal.

Public Adjusters and Business Interruption Claims

Does your Insurance Policy Cover Coronavirus Closing

 

As a Public Adjuster hired by the policyholder to assist in preparing and substantiating an insurance claim, all Public Adjusters have had the following experience. The Insurance Company is sending in XYZ experts to evaluate the damaged property. Quite a few of you reading this just had several names pop into your head.

With all the talk of potential Caronavirus and Business Interruption insurance claims, it’s time to take stock of our skills as well as our limitations. How many of us have the experience to adjust or be the Named Appraiser on a business interruption claim?

Gather Your Experts Now for Business Interruption Claims

Most of us are highly competent with building damage, loss of use, and personal property. The documentation requirements are going to be a handful. The interpretation of those documents will require you to call in the cavalry. Line up your experts now. The insurance companies will be deploying an army of Forensic accountants, Certified Public Accountants, Tax Attorneys, and maybe a few former IRS agents. Public Adjusters and Appraisers better have them, too, along with your Industrial Hygienists and decontamination experts.

All of us in the world of policyholder advocacy should not be handling claims we are not qualified to handle. Have your bullpen stocked, have your battleships on standby. Insurance companies will be digging deep and asking questions that most Public Adjusters and Appraisers should

Can you file a claim for business interruption?

Do you have the resources available to guide your clients through a Business Interruption Claim?

not or could not answer.

Bring yourself up to date on all commercial insurance forms, exclusion, endorsements. Keep up to date on any changes in the law.

Business Interruption Claims and Insurance Appraisal

On the Appraisal front, you can assume that a Business Interruption claim that has come to you for Appraisal will have both sets of documentation that has caused the disagreement in the amount of loss, which has moved the claim into the insurance appraisal process.

In a contentious appraisal, it may be best to have the umpire bring in neutral experts to dissect the conflicting findings. As an Appraiser, you may be an expert in the Appraisal Process, and an expert in accounting, taxes, or business administration may need to help you put together your appraisal finding.

As the named Appraiser substantiating the amount of loss for a business interruption claim, you will be called upon to present the financial damage the Insured has sustained concisely and accurately. Many livelihoods could be riding on our skills and decision in the coming year, on both sides of the policy.

Be Aware Of New Carrier Defense Strategy

March 16, 2020 by  
Filed under Uncategorized

This is a must read.
Estimators make sure you have supporting documentation. Engineering reports, historical data, proof of prior payment or scope approval.
Don’t throw spaghetti against the wall to see what sticks.

Expect carriers to start looking for detailed Appraisal Awards for nullified line items.

Click for full article.

 

Storm Damage, What Now?

March 7, 2020 by  
Filed under Website

It all starts when you have an insurance loss. The first thing you should do is contact your insurance company and get a claim started. This is usually done through your agent, but most companies have a claim page on their website as well.

Depending on the type of loss, you may have some work to do at the house. One of your main responsibilities, written into your policy, is to reduce or eliminate the possibility of further damage, to the best of your ability. For example, if you have water damage, you should call a water damage mitigation company. They will take steps to clean up any standing water and prevent mold growth. Click here for more about the mitigation process. Or if you have structural damage, you should call a contractor to stabilize the area and cover any exposed areas with a tarp.

Click here for more information on the claim process.