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Volume XIII, Number 30


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NYDFS Instructs Insurers to Provide Coverage Information and Explanation of Benefits Regarding COVID-19

In light of the COVID-19 outbreak and the anticipated associated insurance losses, by letter dated March 10, 2020, New York’s Department of Financial Services (NYDFS) instructed each authorized property/casualty insurer to provide certain information regarding the commercial property insurance it has written in New York along with details on the business interruption coverage provided in such policies for which it has ongoing exposure. 

The NYDFS letter was written in response to “policyholders’ urgent questions about the ‘business interruption’ coverages provided by their commercial property insurance policy” in connection with the outbreak of COVID-19. Given the potential impact of COVID-19 on business losses, NYDFS considers “Insurers’ obligations to policyholders a heightened priority.” The NYDFS letter stated that “[i]n the interest of the timely and equitable fulfillment of insurance contracts, Insurers must explain to policyholders the benefits under their policies and the protections provided in connection with COVID-19.” 

Information to Be Provided
Specifically, insurers were instructed to provide the volume of business interruption coverage, civil authority coverage, contingent business interruption coverage and supply chain coverage that the insurer has written. In addition, NYDFS directed each insurer to examine the policies it issued and explain the coverage each policy offers in regard to COVID-19, both presently and as the situation could develop to change the policyholders’ status. 

Additionally, NYDFS required that the following information be included in the explanation to policyholders:

  • Type of commercial property insurance

  • Whether the policy provides business interruption coverage or contingent business interruption coverage

  • An explanation of the “covered perils,” whether the policy contains a requirement for “physical damage or loss” and whether a contamination related to a pandemic may constitute “physical damage or loss”

  • Whether the policy provides civil authority coverage and the type of damage or loss that is sufficient for coverage

  • Whether the policy provides supply chain coverage

  • Whether the policy contains a requirement for “physical damage or loss” and whether a contamination related to a pandemic may constitute “physical damage or loss.”

The insurers’ responses were due by March 18, 2020.

© 2023 Wilson ElserNational Law Review, Volume X, Number 85

About this Author

Siobhán A. Breen Associate New York Directors & Officers Liability Insurance & Reinsurance Coverage

Siobhán A. Breen represents primary and excess professional liability insurers and drafts coverage opinions with respect to complex insurance coverage matters involving directors and officers liability, errors and omissions liability, miscellaneous professional liability, lawyers professional liability, and employment practices liability.

Prior to joining Wilson Elser, Siobhán’s practice consisted of insurance coverage and insurance defense litigation. Siobhán has experience in securities class actions, shareholder derivative actions, cyber/privacy actions, and professional...

Paul S. White Partner Insurer Litigation: Coverage/Extra-Contractual Insurance & Reinsurance Coverage Professional Liability & Services

Paul White focuses his practice on complex insurance coverage and bad faith litigation and represents defendants in commercial litigation. Paul's insurance coverage practice includes advising and representing insurers in bad faith litigation and insurance policy disputes, including first-party property policies, general liability coverage, errors and omissions insurance, and media liability insurance. He also advises and represents insurers in subrogation actions on property losses. In addition, Paul has litigated and arbitrated disputes throughout the United States involving domestic and...