PANDEMIC RISK INSURANCE
The COVID-19 crisis has highlighted the lack of insurance availability for business continuity coverage for catastrophic pandemic events. Most business interruption insurance policies do not cover pandemic risk-related claims, raising urgent concerns among policyholders – including owners of real estate, the event industry and professional sporting leagues. There are a number of proposals under consideration – including the Pandemic Risk Insurance Act of 2020 (PRIA), that would establish a federal backstop for pandemic risk coverage.
The Roundtable is working with industry partners, stakeholders and policymakers through the newly formed Business Continuity Coalition (BCC) to develop and enact an effective federal pandemic risk/business continuity insurance program that provides the economy with the coverage it needs to provide business continuity coverage in the face of pandemic risk. Looking ahead, a federal business continuity insurance program should be put into place before there is a recurrence of pandemic or government Ordered shut down in response to other phenomena.
The pandemic crisis has exposed gaps in business continuity insurance coverage that can only be filled by a national program that will provide the American economy with the coverage it needs to minimize the economic impact of pandemic-related shutdowns and aid economic recovery.
Legislation introduced on May 26, 2020 by Congresswoman Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, would create the Pandemic Risk Reinsurance Program – a federal backstop that would provide capacity for pandemic risk insurance and maintain marketplace stability with the private sector, modeled after the Terrorism Risk Insurance Act (TRIA).
Rep. Maloney’s bill – the Pandemic Risk Insurance Act of 2020 (PRIA), H.R. 7011 – has 20 Democratic cosponsors, including four who serve on the House Financial Services Committee.
The insurance industry-backed Business Continuity Protection Program, proposed in advance of Rep. Maloney’s PRIA bill, would provide revenue replacement assistance for payroll, employee benefits and operating expenses following a presidential viral emergency declaration.
The Real Estate Roundtable, along with its industry partners, continues to work constructively with policymakers and stakeholders to develop and enact an effective pandemic risk/business continuity program
Senior Vice President