On May 12, 2021, New Jersey adopted a law requiring insurers issuing policies covering loss or damage to property, including the loss of use and occupancy and business interruption, to provide their insureds with a one page summary of common insurance clauses in such commercial property policies. The summary, which was developed by the New Jersey Department of Banking and Insurance (“DOBI”), was posted on their website on August 16, 2021 and must be provided to all existing policyholders within 90 days of its posting (which is November 13, 2021). The summary is also required to be provided to any potential purchaser, or to any policyholder seeking renewal.
The purpose of the summary is to apprise insureds of the nature of their policy and to set expectations with respect to coverage. Specifically, the summary describes common aspects of commercial property coverage, including loss of business income, and clarifies to the insured that “[m]ost business interruption insurance policies cover losses sustained due to a suspension of business where the suspension was caused by direct physical loss of or damage to property or the insured’s premises, and where the loss or damage is caused by or results from a specified peril or covered cause of loss.” The summary also includes a disclaimer that it does not alter the coverage afforded by the policy and is being provided to the policyholder as guidance and to assist in the insured’s “understanding [of] the terms of the policy of insurance.”
You can find a description of the summary on the DOBI’s website and the full text of the summary can be found here. The DOBI’s website notes that insurers are “required” to use this summary and cannot deviate from it.
You can find the text of the original legislation on the New Jersey’s State Legislature’s website: Senate Bill S3169 and Assembly Bill A4805.
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