New York’s Governor George E. Pataki announced that he has introduced legislation to provide enhanced insurance protections for New York State business owners.
The Governor said the legislation would allow for the availability of more meaningful, adequate and flexible coverage options for economic loss resulting from business interruptions in times of emergencies.
“The bill creates a new stand-alone line of coverage called ‘civil authority insurance,’ which would authorize insurers to provide additional coverage to protect businesses when an action of a governmental authority results in the loss of business income,” said the announcement. It would expand the benefits currently offered under Business Interruption insurance by eliminating the prerequisite of actual physical damage to the insureds’ premises as the trigger for such coverage.
“The civil authority insurance legislation will provide New York businesses with access to additional insurance coverage options to better suit their needs in times of an emergency,” Pataki indicated. “This legislation would be especially helpful to businesses that had to temporarily close or whose operations were negatively impacted as result of the tragic events of September 11th.”
He observed that after September 11th many downtown Manhattan businesses were not protected by the safety net previously afforded by business interruption coverage alone. “This bill will help New York State’s business community, especially small businesses, stay in business during trying times,” he stressed.
Insurance Department Superintendent Gregory V. Serio commented: “The Governor’s initiative exemplifies the administration’s continued commitment to improving New York State’s business environment. Natural disasters and other emergency situations show the need to bridge the gaps in coverage that exist under the terms of current policies. The Governor’s Program Bill again responds to this need and provides coverage that is a vital component for a business’ financial well being.”
The announcement noted that “In recent years, millions of dollars have been lost by businesses as a result of necessary government action that forced business closures for a period of time because of circumstances beyond an insured’s control.” It gave as examples the North Country Ice storm of January 1998 that closed many roads due to the dangerous ice conditions, and the dangerous conditions in New York City in the same year that led to street closures around Times Square and on Madison Avenue, which effectively shut down businesses that were physically undamaged, but in proximity to the hazardous conditions. It also noted the devastating economic hardship suffered by businesses in 2000 as a result of landslides that occurred along Delaware Avenue in the Town of Bethlehem, Albany County.
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