Lexington Insurance Company, a member company of AIG, has launched Tax Interruption Insurance, a new product that covers the financial losses a municipality suffers when sales, property, or other scheduled tax revenue streams are disrupted as a result of physical loss or damage to a commercial location.
A municipality can suffer significant loss of tax revenue when a business located within that municipality experiences a property loss. Tax Interruption Insurance fills a vital need for municipalities that cannot afford to remain vulnerable to this exposure, said Kevin Kelley, chairman and CEO of Lexington Insurance Company.
A new stand-alone coverage for public entities, Lexington’s Tax Interruption Insurance is designed for municipalities with populations of up to 50,000. Municipalities can purchase aggregate policy limits of up to $20 million.
Coverage is triggered when an insured peril causes direct physical loss or damage to real or personal property at a business location specified on the policy, which results in that business’ non-payment of sales, property, or other scheduled tax revenue to the municipality.