Businesses with less than 100 full time employees might be about to get financial relief from their insurance companies, with an assist from the State of New Jersey.

On Monday, the New Jersey assembly unanimously passed A-3844, a bill that would modify existing, in-force insurance policies to cover business income losses arising from the current pandemic.  The bill will affect only those companies with 100 or fewer full-time employees.  The bill’s statement of legislative purpose explains:

“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 statement continues:

“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.”

If A3844 is enacted into law, it will dramatically alter the analysis of potential insurance claims for lost income and extra expenses incurred by businesses with less than 100 employees.  As a result, businesses with 100 or fewer full-time employees should stay closely apprised of the bill’s progress.  If it becomes law, affected companies will want to move quickly to begin processing and documenting their claims for lost income and other insurance benefits.

Our firm will continue to track the bill’s progress and we are ready to assist policyholders to analyze and pursue insurance claims arising from the pandemic.

Santomassimo Davis LLP is a premier Outside General Counsel™ firm to mid-cap businesses. The issues discussed in this article are typical of those that we handle for clients as we help them navigate the legal and regulatory matters affecting their businesses. For help with these issues or to learn more about the Outside General Counsel™ solution, please contact us on OGCSolutions.com.