On September 27, 2024, New York Governor Kathy Hochul signed Bill No. A10342 into law, authorizing the issuance of stand-alone business interruption insurance coverage. This bill was introduced and passed in response to the COVID-19 pandemic, which forced many businesses to close temporarily as a result of government shutdown orders.

Many affected businesses submitted insurance claims under business owners or property insurance policies, which included some form of business interruption coverage. The problem was that such coverage was conditioned upon “[direct] physical loss [of] or damage” to covered property. Because of the requisite property damage trigger, most businesses were denied business interruption coverage, often spurning litigation. Courts nationwide have held, almost uniformly, that economic losses due to government-ordered shutdowns, enacted to prevent the spread of the coronavirus, do not constitute “physical loss” or “physical damage” to covered property.

Reprinted courtesy of Janeen M. Thomas, Saxe Doernberger & Vita, P.C. and David G. Jordan, Saxe Doernberger & Vita, P.C.

Ms. Thomas may be contacted at JThomas@sdvlaw.com
Mr. Jordan may be contacted at DJordan@sdvlaw.com