Hurricane Ian Shoreline Loss: Four Policies, Oh Joy!
October 19, 2023
ON JUNE 16, 2020, THE NEVADA DIVISION OF INSURANCE (“NVDOI”) ISSUED A NOTICE TO PROPERTY AND CASUALTY INSURERS
regarding the disallowance of new exclusions related to COVID-19, viruses, or pandemics. The Notice states that the NVDOI “will not approve any new policy or endorsement language containing exclusions of coverage that specifically mention COVID-19, viruses, or pandemics.” The NVDOI authority to disallow these new exclusions comes from the State of Emergency in effect in Nevada since March 12, 2020.
This notice does not impact existing policies that were submitted and approved before the COVID-19 emergency in Nevada. However, the NVDOI has requested that insurers voluntarily withdraw any such exclusions from policies submitted and approved on or after March 12, 2020.
It is unclear how long the disallowance will continue or whether this disallowance will become permanent in Nevada. The NVDOI notice states that this decision to “temporarily disallow” these exclusions is “due to the need to protect consumers against unexpected narrowing of previously expected insurance coverage and ambiguity of interpretation of insurance contracts during a time of great uncertainty and financial strain ensuing from the COVID-19 pandemic.” The Notice also states that the NVDOI will not approve any exclusion language related to COVID-19, viruses, or pandemics until “the Governor’s Declaration of Emergency related to COVID-19 is lifted[.]”
The NVDOI notice addresses concerns that some insurers have taken the position that their policies of insurance that predated the COVID-19 pandemic exclude coverage for business interruption and related perils arising from viruses or pandemics. The NVDOI expressly stated that it does not express any opinion on these statements and that the language of a specific insurance policy determines what it does or does not cover, provided that it complies with applicable laws. However, the NVDOI expresses its concern that insurer attempts to clarify their position as to what coverage is provided in their policies by issuing new exclusionary language could “engender confusion, leading many policyholders to believe that the peril was not excluded in the past but has only come to be excluded in reaction to COVID-19″ and could also “inject new ambiguity into matters of policy interpretation.”
The NVDOI Notice can be accessed here.
For any further questions, please contact Jonathan Barger.