Retailers demand 9/11-inspired coronavirus insurance help amid pandemic
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The retail industry wants lawmakers to act in order to help businesses obtain insurance coverage for pandemic-related losses as the unprecedented coronavirus outbreak sweeps the globe.
In a letter to Congress on Tuesday, the National Retail Federation and more than a dozen other groups asked lawmakers to pass a piece of legislation that would set up a pathway for businesses to be able to obtain insurance for pandemics.
“When businesses couldn’t obtain coverage for acts of terrorism after 9/11, Congress stepped in,” NRF Senior Vice President for Government Relations David French said in a statement. “It’s time for Washington to do the same for pandemics. Retailers and other businesses across the country have seen unprecedented losses related to COVID-19 that weren’t covered under most current insurance policies and won’t be covered if there’s a second wave of the virus next winter.”
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The legislation is expected to be introduced in the House of Representatives soon – it is modeled on the Terrorism Risk Insurance Act passed after the September 11 terrorist attacks. It would require insurance companies to offer coverage for pandemics or epidemics under the condition that insurers would be reimbursed by the federal government if claims exceeded $250 billion nationwide. The program would be capped at $500 billion.
In order to receive a payout, businesses would be required to show significant business interruption with a sharp decline in revenue.
Coverage would also extend to large gatherings that are canceled under epidemic-related conditions.
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The legislation would only apply to future outbreaks and would not help businesses suffering under current conditions.
In March, retail sales saw their largest monthly drop on record.
Meanwhile, insurers have found themselves in the crosshairs as businesses throughout the country have been forced to close under guidelines issued by governments.
As previously reported by FOX Business, the restaurant industry is threatening legal action against insurers for “wrongfully denying business interruption insurance coverage.” Many companies have been paying for the insurance for years.
Business interruption insurance typically doesn’t cover communicable diseases, pertaining instead to disruptions attributable to physical damage – like a fire, flooding or vandalism.
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Oftentimes these policies don’t mention pandemics, though sometimes they include them as an exclusion.
The Business Interruption Group is promising legal action, however, in “every state against insurers who deny funds for civil authority coverage.”
“Immediate payment is due on policies that do not contain a virus exclusion,” John Houghtaling, the group’s general counsel, said in a statement.
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