America's Business Owners Need Federal Relief From Our Next Congress
October 19, 2020

With the election weeks away, the post-COVID economy is the top-of-mind issue for politicians and voters alike. Policymakers must establish a viable, sustainable, and inclusive government-backed solution to provide the immediate relief that business owners need if America’s economy is to truly recover. 

Although global pandemics are uninsurable, business owners around the nation are currently caught up in pricey, slow-moving litigation to fight their insurers for claims their business interruption insurance contracts did not cover. At least 13 court decisions made so far affirm that insurers cannot be held responsible for the economic devastation caused by this pandemic.

A new report by ratings company AM Best asserts that a government-backed pandemic risk backstop is necessary given that pandemics are uninsurable and the policyholder’s surplus is only so large. “Uncertainty from lawsuits aimed at insurers and legislative policy measures being contemplated that would nullify business interruption exclusions” will create major challenges for the insurance industry in determining reserve estimates and payout patterns.

In an Insurance Journal piece on the election’s potential impacts for the insurance industry, Andrew Simpson notes that the need for a government solution for managing pandemic risks won’t disappear when 2021 rolls around, “[r]egardless of whether Democrats or Republicans are in charge.” 

There are several proposed solutions out there already, including the Business Continuity Protection Program (BCPP) and the Pandemic Risk Insurance Act (PRIA), but no matter which policymakers are elected to serve in 2021, we need a solution that adheres to the following principles:

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