Lexington Insurance Co., a member of American International Group Inc. in New York, started a tax-interruption insurance product Monday that alleviates municipal revenue losses when sales, property, or other taxes are disrupted by physical loss or damage to a commercial site.
A new stand-alone coverage for public entities, Lexington's tax-interruption policy is meant for municipalities with populations of up to 50,000. Coverage is triggered when an insured peril causes direct physical loss or damage to real or personal property at a business site specified on the policy, which causes that business' nonpayment of sales, property, or other scheduled tax revenue.
Specified sites can range from local factories to retail shops or superstores. Municipalities can buy aggregate policy limits of up to $20 million.
