Massachusetts Division of Insurance Urges Carrier Flexibility with Vacancy Provisions

The Massachusetts Division of Insurance has notified all property and casualty insurance carriers in the state that they are expected to take steps to preserve insurance coverage for businesses ordered to shut down due to the coronavirus crisis.

“Insurance coverage plays a critical role in the stability of the Commonwealth’s economy and the protection of its residents,” Massachusetts Insurance Commissioner Gary Anderson said in a bulletin issued May 18. “COVID-19 may impose unique risks to our insurance market that Massachusetts has not faced for at least a generation.”

Many businesses in Massachusetts were not considered essential businesses and were ordered to shut down due to the COVID-19 virus, resulting in those properties being unoccupied for an extended period of time. As many commercial insurance policies may include provisions that limit coverage if a property is vacant for a certain number of days, the bulletin urged carriers in Massachusetts to be flexible in counting days of vacancy to provide coverage for business owners whose operations have been disrupted by the pandemic.

The bulletin outlined that carriers in the state are expected to exclude days that a property is vacant due to Massachusetts Governor Charlie Baker’s Emergency Orders when counting days that a property has been vacant, given that the property is properly secured according to the terms of coverage on those days.

“…the public health and societal consequences resulting from the spread of COVID-19 has dramatically impacted the Commonwealth,” Anderson explained in the bulletin. “It has been essential that government and business leaders take all appropriate steps to safeguard the general public and well-being of the Commonwealth’s citizens.”