On March 30, 2020, the New York State Department of Financial Services ("NYDFS") adopted emergency regulations, available here, requiring New York regulated issuers of life insurance and annuity contracts, property and casualty ("P&C") insurers, and premium finance agencies ("PFAs") to provide relief to New York State businesses and consumers experiencing financial hardship from the COVID-19 health crisis. The NYDFS promulgated the forbearance rules in response to Governor Andrew Cuomo’s March 29, 2020 Executive Order No. 202.13 (the "Executive Order"), available here, which modified, among other things, New York Insurance Law pertaining to grace periods, cancellations, nonrenewals and conditional renewals of insurance policies, including personal and commercial line P&C policies. In particular, the Executive Order imposes a moratorium on a P&C insurer’s ability to cancel, non-renew, or conditionally renew any P&C policy for 60 days where the policyholder is facing financial hardship as a result of the COVID-19 pandemic. The NYDFS’ newly adopted regulations further clarify and expand on this relief to P&C policyholders in a number of significant ways.

MHH Practical Takeaway: Executive Order 202.13 and the subsequent NYDFSadopted regulations provide clear types of forbearance for small business policyholders with P&C insurance. Given the vast array of coverages and products that fall within commercial and specialty lines of P&C insurance—such as general liability, cyber liability, errors & omissions (E&O) liability, directors & officers (D&O) liability, employment practices liability (EPL), workers’ compensation, commercial auto, equipment breakdown, ocean marine, professional liability, etc.—the relief is applicable to small businesses across virtually all industries. This breadth coupled with the low threshold for establishing "financial hardship" provides small businesses (and individuals) with yet another readily available option to ease the financial burden resulting from the current crisis. That said, businesses are encouraged to carefully evaluate their specific situations, needs, and other available forms of emergency financial assistance—which they may have already received— before availing themselves of additional relief.