Bill

Bill > S883


NJ S883

Prohibits certain provisions in liability insurance policies.


summary

Introduced
01/27/2022
In Committee
01/27/2022
Crossed Over
Passed
Dead
01/08/2024

Introduced Session

2022-2023 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 them to deny coverage for a claim based solely on the fact that the claim is similar to an unrelated prior claim or event. Such provisions, known as "interrelated wrongful act clauses" or "prior and pending proceeding clauses," can enable insurers to deny coverage even when the current claim is unrelated to the previous one. The bill aims to prohibit this practice, which can unfairly deprive policyholders of coverage they have paid for. The bill applies to liability insurance policies issued or renewed on or after the effective date of the act.

Committee Categories

Business and Industry

Sponsors (1)

Last Action

Introduced in the Senate, Referred to Senate Commerce Committee (on 01/27/2022)

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