The Business Council is strongly supporting a bill that would allow New York businesses to buy "business interruption" insurance against economic losses stemming from government actions in response to emergencies.
The bill (S.7576) was originally a Governor's program bill. It is co-sponsored in the Senate by Sen. James Seward and Sen. James Alesi, and has already been approved by the Insurance Committee, chaired by Sen. Seward, said Chris Puglisese, The Council's specialist in insurance issues. The Council is working on securing Assembly sponsorship and hopes that the bill will be passed this year, he said.
The bill would authorize insurers to write a new kind of policy to protect businesses from losses linked indirectly to natural disasters and other emergencies, Pugliese said.
"Now, businesses can get insurance that protects them from damage done directly by, for example, an ice storm in the North Country or a hurricane on Long Island," Pugliese said. "But that insurance will only protect them from the direct effects of the ice or wind or rain.
"If a government entity has to close a road or a canal to clean up after such a disaster, other businesses are hurt because their customers can't reach them, but their current policies won't cover losses because the losses are not a direct result of the storm," he added.
The Seward-Alesi bill would allow businesses to buy insurance to cover them against such indirect losses.
In January 1998, a severe North Country ice storm required the closing of many roads. That same year, dangerous conditions in Times Square and on Madison Avenue require the closing of streeets. In both cases, businesses were shut down even though they were physically undamaged and thus unable to collect on traditional business interruption coverage.
"We commend Senator Seward and Senator Alesi and Governor Pataki for championing this bill, which would significantly enhance New York's business climate," Pugliese said.