BILL NUMBER: S9481
SPONSOR: MAYER
 
TITLE OF BILL:
An act to amend the insurance law, in relation to authorizing stand-al-
one business interruption insurance
 
PURPOSE OF THE BILL:
This bill would amend the Insurance Law to authorize stand-alone busi-
ness i Summary of provisions
 
SUMMARY OF PROVISIONS:
Section 1 would renumber Insurance Law § I l 13(a)(34) as (35) and add a
new paragraph (34) to stand-alone business interruption
Section 2 would amend Insurance Law § 2105(a) to permit an excess line
broker to procure business interruption insurance.
Section 3 would amend Insurance Law § 4101(a) to make business inter-
ruption insurance a "basic kind of insurance."
Section 4 would amend Group A of Table One, as set forth in Insurance La
§ 4103(a)(1), to establish minimum paid-in capital and paid-in surplus
requirements for stock insurers that write business interruption i
Section 5 would amend Table Two, as set forth in Insurance Law § 4107(aX
I), to establish certain minimum requirements, including minimum initial
surplus and minimum surplus to be maintained requirements, for mutual
insurers that write business interruption insurance.
Section 6 would provide that the bill takes effect 30 days after it is
signed into law.
 
JUSTIFICATION
Currently, business interruption insurance typically covers loss of net
profits when a covered peril, such as a fire, causes "direct physical
loss of or damage to" insured property resulting in a closure or a
reduction in business. Businesses may purchase additional coverage that
applies if the business closes by order of a civil authority. Although
this coverage extends business interruption insurance to cover loss of
net profits when access to an insured's property is prohibited by an
order of civil authority, the business must close because of physical
damage to a neighboring property that makes it unsafe for the business
to open. As demonstrated with the coronavims disease 2019 ("COVID-19")
pandemic, a business may be forced to close without the insured property
or neighboring property suffering physical damage. Also, insurers,
particularly in the excess line market, wish to write business inter-
ruption insurance that is not tied physical damage as part of active
shooter policies. This bill would amend Insurance Law § 1113(a) to make
business interruption insurance an authorized kind of insurance that
does not need to be tied to physical damage and would amend Insurance
Law § 2105 to permit this insurance to be written in the excess line
market if it is unavailable from authorized insurers. As a result, the
bill would allow insurers to sell business intenuption insurance that is
not tied to physical damage, which businesses could purchase in the
event of future pandemics or other events where them may not be physical
damage to the property, such as an active shooter threat.
 
FISCAL IMPLICATIONS:
This bill will increase revenue in New Yak in the form of additional
premium taxes if insurers can write this additional kind of insurance.
 
EFFECTIVE DATE:
Thirty days after it is signed into law.

Statutes affected:
S9481: 2105 insurance law, 2105(a) insurance law, 4101 insurance law, 4101(a) insurance law, 4107 insurance law, 4107(a) insurance law