New York Congresswoman Carolyn B. Maloney is calling for a pandemic insurance program that could help protect businesses from losses wrought by future pandemics or public health emergencies.
The senior member of the House Financial Services Committee yesterday introduced H.R. 7011, the Pandemic Risk Insurance Act of 2020 (PRIA) that would create a system of shared public and private compensation for business interruption losses resulting from another crisis like coronavirus.
“Millions of small businesses, nonprofits, mom-and-pop shops, retailers, and other businesses are being left out in cold and will never be able to financially recover from the coronavirus crisis because their businesses interruption insurance excludes pandemics,” said Congresswoman Maloney.
“We cannot allow this to happen again. These employers and their employees need to know that they will be protected from future pandemics, which is why I am introducing the Pandemic Risk Insurance Act.”
Maloney was among the backers of the Terrorism Risk Insurance Act (TRIA) set up in the wake of the 9/11 terror attacks to help NYC recover.
That law, which expires at the end of 2020, was enacted after the attacks shut down insurance markets when companies were unable to accurately model for terrorism risks because they couldn’t predict where a terrorist attack is most likely to happen, and how likely it was to occur.
The Pandemic Risk Insurance Act would require insurance companies to offer business interruption insurance policies that cover pandemics, and create a Pandemic Risk Reinsurance Program to ensure that there is sufficient capacity to cover these losses and protect our economy in anticipation of a resurgence of COVID-19 and future pandemics.
Like the Terrorism Risk Insurance Act (TRIA), the federal government would serve as a backstop to maintain marketplace stability and to share the burden alongside private industry.
“9/11 exposed the need for terrorism risk insurance, and since the impact of coronavirus on the travel industry has been nine times that of 9/11, it is very sensible to offer a similar backstop for pandemics,” said Tori Emerson Barnes, U.S. Travel Association Executive Vice President for Public Affairs and Policy.
“None of us know when this pandemic will end or when another will begin,” said Chai Jindasurat, Policy Director at Nonprofit New York, an association of over 1,500 nonprofits.
“Congresswoman Maloney’s Pandemic Risk Insurance Act is a proactive, market-friendly insurance solution to fund and cover future business losses that will create much-needed stability for our economy and our communities.”
Leon Buck, National Retail Federation Vice President for Government Relations, Banking and Financial Services, added, “The development of a public-private partnership to address this risk will provide certainty for businesses and organizations of all sizes and will ensure that we can meet future pandemic events with greater reliance.
“Not every pandemic will have worldwide impact, but when and where one occurs it is likely to result in a nearly total cessation of business. This legislation is the cornerstone of a proactive approach in managing the risk and impact of a pandemic or epidemic in the future.”