The Division of Insurance (DOI) has issued Bulletin 2020-17, dated May 18, 2020, which acknowledges the fact that many MA businesses not deemed essential were required to close, and advising all property and casualty carriers in MA that they “should be looking for all ways to be flexible in counting days of vacancy to provide coverage to business owners during COVID-19 public health crisis.”
The Bulletin 2020-17 states that carriers are expected to do the following:
- Take steps to be flexible with accounts regarding vacancy limitations in policies issued to those businesses not deemed "essential" under Governor Baker's Emergency Orders and which have not been allowed to operate under COVID-19 rules.
- When counting days that a property is considered vacant, exclude days that the property is vacant due to the Governor's Emergency Orders, provided that the property is properly secured according to the terms of the coverage on those days.
What Does This Mean for You, The Agent?
Commercial policies typically have a vacancy clause that excludes certain losses (or reduces loss payments) after the property is vacant for 60 days. That’s because the longer a property sits vacant, the more susceptible it is to issues like vandalism or theft, which can escalate as it goes unnoticed. The DOI doesn’t want the carriers to use forced shutdown time in computing the 60 days of vacancy, so the business building owners will not have to worry about the vacancy provision rearing its ugly head … should a loss occur during the forced COVID shutdown.
Agents can use this information to help their commercial clients by suggesting that the business owner be prudent and inspect their building routinely – at least once a week – to make sure that if a loss situation is happening, it gets addressed immediately.
If you have any questions about this DOI Bulletin, please contact Kevin Beagan, Deputy Commissioner, at (617) 521-7323.