Bill

Bill > A3180


NJ A3180

Prohibits certain provisions in liability insurance policies.


summary

Introduced
02/24/2020
In Committee
02/24/2020
Crossed Over
Passed
Dead
01/11/2022

Introduced Session

2020-2021 Regular Session

Bill Summary

This bill prohibits an insurer from including in a liability insurance policy a provision that provides that the insurer will not be liable for any loss for any claim based upon the fact that the loss or claim is similar to any fact, circumstance, situation, transaction, event, or wrongful act underlying or alleged in a separate proceeding or claim. Certain insurance policies include provisions that state that the insurer will not be liable for any loss for any claim based upon or arising out of any same or substantially same or similar fact, circumstance, situation, transaction, event, wrongful act or related wrongful act underlying or alleged in such demand, suit, or other proceeding. In effect, such a provision allows the insurer to deny coverage based on the mere fact that a similar, but unrelated, event to the one being alleged in a claim may have occurred. For example, a medical malpractice insurer could attempt to deny coverage for an alleged claim of medical malpractice based upon a similar occurrence in an unrelated case. This bill is intended to prohibit such a provision, sometimes referred to as an "interrelated wrongful act clause" or "prior and pending proceeding clause," in liability insurance policies as it relates to a similar fact, circumstance, situation, transaction, event, or wrongful act underlying or alleged in a separate, unrelated proceeding or claim.

AI Summary

This bill prohibits insurers from including in liability insurance policies a provision that allows the insurer to deny coverage for a claim based on the fact that the loss or claim is similar to a separate, unrelated proceeding or claim. This type of provision, known as an "interrelated wrongful act clause" or "prior and pending proceeding clause," can lead to insurers denying coverage for legitimate claims just because a similar, but unrelated, event may have occurred in the past. The bill aims to prevent this practice and ensure that insurers provide coverage for valid claims, even if they may be similar to other unrelated events.

Committee Categories

Business and Industry

Sponsors (1)

Last Action

Introduced, Referred to Assembly Financial Institutions and Insurance Committee (on 02/24/2020)

bill text


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