The Department of Banking and Insurance Orders Insurers to Refund Premiums for New Jersey Policyholders Affected by COVID-19
On May 12, 2020, the Department of Banking and Insurance (the Department) issued Bulletin No. 20-22 (the Bulletin) that orders insurance companies to refund and reduce premiums to New Jersey policyholders adversely impacted by the COVID-19 pandemic and government action taken in response to the pandemic. The Department’s requirement applies to insurers of various lines of insurance, including commercial general liability and worker compensation insurers, and applies to premiums charged for each month during which the public health emergency is in effect. In New Jersey, Governor Phil Murphy declared a public health emergency on March 9, 2020, and it will remain in effect until at least June 5, 2020, pending any further extensions the Governor deems appropriate.
Developers, contractors and other businesses in the construction industry are no exception to the list of those affected by the pandemic and responsive government action that would qualify as “adversely-impacted New Jersey policyholders.” Among other mandates, all businesses were directed to cease performing all “non-essential construction projects” by April 10, 2020 under New Jersey Executive Order No. 122. With fewer, if any, construction projects being worked on by these businesses, the risks that they sought to protect themselves against and shift to insurers through their policies have unquestionably been reduced.
While some insurers had already voluntarily agreed to reimburse their policyholders, the Department’s Bulletin importantly now requires such action by all insurers. Insurers are directed to provide the premium adjustments as soon as practicable, but by no later than June 15, 2020. Along with the refunds, credits or other adjustments, insurers are required to provide an explanation of the basis for the adjustment, which shall include the policy period and any classification or exposure changes serving as the basis of the premium refund. The policyholder shall also be given the opportunity to provide their individual actual or estimated experience.
We recommend reviewing the status of the construction projects in which you were involved during the public health emergency, particularly since Executive Order No. 122 went into effect on April 10, 2020, to ensure that the refund you receive from your insurer is commensurate with the impact the pandemic and government action has had on your business.
If you have any questions about your commercial general liability insurance policies and prior or upcoming reductions to your premiums, please contact Don Taylor at 732.855.6434 or firstname.lastname@example.org, or Dan Kluska at 732.855.6033 or email@example.com.
The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services. Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness. The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.
This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk. We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability. Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein. We will remove a link to any site from this blog upon request of the linked entity.
We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.
If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com. One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.