Governor Kathy Hochul signed a bill that clarified the provisions recently allowing for commercial risk policies of less than one year under New York Insurance Law Section 3426. The original amendments, enacted in December 2021, provided generally that commercial risk policies of less than one year may be written if requested by the insured and offered by the insurer. The amendments clarify that the provision applies to liability policies and as long as certain other requirements are satisfied. For example, the insurer must also offer the insured the option of purchasing a policy of a term of one year, write the policy on an occurrence basis and on a defense cost outside limits basis, and the policy must provide for coverage of at least one month. The provisions do not extend to medical malpractice, policies satisfying financial responsibility laws or public entity insurance.
Prior to the recent amendments, short-term commercial risk policies were permitted in certain limited circumstances, such as a policy issued to an insured for a seasonal purpose or a policy issued to cover a specific event or particular product that will be performed in less than one year. While these continue to be permitted, the amendments expand the ability of insurers to write short-term liability policies.
A copy of the bill can be found here. The amendments are effective as of the date of the original changes, January 20, 2022.
The post New York Clarifies Provisions Allowing for Policies Under One Year appeared first on Insurance & Reinsurance.
Visit our Insurance & Reinsurance Blog for the latest news and developments.Visit the blog
Sign up for our newsletter and get the latest to your inbox.