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Press Office

Wednesday, June 4, 2003


Would Enhance Insurance Protections for Businesses In Times Of Emergencies

Governor George E. Pataki today announced that he has introduced legislation to provide enhanced insurance protections for New York State business owners. The Governor’s legislation would allow for the availability of more meaningful, adequate and flexible coverage options for economic loss resulting from business interruptions in times of emergencies.

The bill creates a new stand-alone line of coverage called 'civil authority insurance,' which would authorize insurers to provide additional coverage to protect businesses when an action of a governmental authority results in the loss of business income. This bill would expand the benefits currently offered under Business Interruption insurance by eliminating the prerequisite of actual physical damage to the insureds’ premises as the trigger for such coverage.

"The civil authority insurance legislation will provide New York businesses with access to additional insurance coverage options to better suit their needs in times of an emergency," Governor Pataki said. "This legislation would be especially helpful to businesses that had to temporarily close or whose operations were negatively impacted as result of the tragic events of September 11th."

"After September 11th, it was clear that many downtown Manhattan businesses were not protected by the safety net previously afforded by business interruption coverage alone," Governor Pataki said. "This bill will help New York State’s business community, especially small businesses, stay in business during trying times."

"The Governor’s initiative exemplifies the administration’s continued commitment to improving New York State’s business environment," said Superintendent Gregory V. Serio. "Natural disasters and other emergency situations show the need to bridge the gaps in coverage that exist under the terms of current policies. The Governor’s Program Bill again responds to this need and provides coverage that is a vital component for a business’ financial well being."

In recent years, millions of dollars have been lost by businesses as a result of necessary government action that forced business closures for a period of time because of circumstances beyond an insured’s control.

The North Country Ice storm of January 1998 necessitated the closing of many roads due to the dangerous ice conditions. Similarly, in 1998, the dangerous conditions involving buildings in New York City’s Times Square and on Madison Avenue required the streets to be closed for extended periods of time, shutting down businesses that were physically undamaged, but in proximity to the hazardous conditions.

Likewise, in 2000, businesses along Delaware Avenue suffered devastating economic hardship as a result of landslides that occurred in the Town of Bethlehem, Albany County.


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