Provides for insurance against expenses and business income losses from acts or threats of violence and adds representations and warranties and tax…

◆ The sponsor's argument

Why Jamaal Bailey says this is needed

New York law is intended to allow insurance to respond to the harms caused by active assailants and other acts or threatened acts of violence, but the current statutory language is too narrow to allow for coverage that addresses the full extent of the impacts. Whether an active shooter is targeting their victims from a sniper's perch across from an office building, or walking around the insured's grocery store or farmland, the results can be catastrophic for the insured and all injured parties. Less obvious is the extent of additional costs arising out of these events, such as a loss of business income due to closure of the affected insured premises or reduction in operations, as well as crisis response and subsequent mitigation and prevention measures. For instance, the current language limits permissible coverage only for incidents where an assailant is physically present on the premises. This bill seeks to effectuate the intent of the law: to protect against the full range of insurable losses arising from an act or threatened act of violence, bullying, stalking, or abduction, whether or not the perpetra- tor is on the premises, and to support costly efforts to prevent repeat events. Such critical coverage is available in most other states. Because New York's anomalous insurance law does not allow insurance to be written unless it is one of the kinds enumerated in section 1113(a), it is important to thoughtfully update that section to reflect the evolving needs of consumers, and to ensure that New York residents and businesses have access to the same protections as those in other states. Representations and warranties insurance and tax interpretation insur- ance have been offered in New York by the admitted and non-admitted markets for decades as part of other kinds of insurance that are permit- ted under section 1113(a). Explicitly adding each to section 1113(a) will permit the Department of Financial Services, the Excess Line Asso- ciation of New York, and others to better track the placement activity and performance of these distinct products and classes of business. Additionally, providing explicit definitions for each kind of insurance clarifies to agents, brokers, and insurers that these protections are permissible in New York, preventing any misinterpretation of the law that might deter insurers from writing the products in New York or deter enterprises from doing business in New York under the misunderstanding that such protections are unavailable. Similarly, the bill clarifies the statutory basis for contractual liability cover that is included in personal liability insurance or property damage legal liability insur- ance.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.