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Another Troubling Business Interruption Bill Introduced in the House

The bill would create a new federal program to encourage insurance companies to pay out business interruption claims on policies that explicitly exclude viral pandemics.
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This week, yet another business interruption bill was introduced in the U.S. House of Representatives. Rep. Mike Thompson (D-California), a staunch supporter of retroactive business interruption, introduced H.R. 7412, “the Business Interruption Relief Act of 2020.”

Specifically, the legislation would create a new federal program funded by taxpayer dollars to encourage insurance companies to pay out business interruption claims that explicitly exclude viral pandemics. Unfortunately, the establishment of the Business Interruption Relief Program (BIRP) distracts from the nation’s response to COVID-19 as business interruption coverage is only purchased by about 40% of commercial property insureds and only 30% of small businesses. As a result, this legislation would only benefit a few small businesses and be ineffective in providing the vast, large-scale solutions needed. It would also ignore the clear contract language in many insurance policies.

In response to the introduction of this legislation, the Big “I,” along with the National Association of Mutual Insurance Companies (NAMIC), American Property Casualty Insurance Association (APCIA), Reinsurance Association of America, the Council of Insurance Agents and Brokers, and the Wholesale and Specialty Insurance Association, sent a letter to Rep. Thompson opposing the legislation.

The letter notes that “the establishment of the Business Interruption Relief Program (BIRP) within the Treasury Department, as H.R. 7412 proposes to create, would ultimately not work to alleviate the genuine struggles currently faced by millions of our policyholders.”

Instead of focusing on counterproductive proposals like H.R. 7412, the Big “I” is instead working with its insurance industry partners to create solutions on addressing future pandemics. Specifically, the Big “I” has joined with APCIA and NAMIC in announcing its support for the Business Continuity Protection Program (BCPP).

The BCPP is designed to bolster the country’s economic resilience by providing timely and efficient financial protection and payroll support to the private sector in the event of a future declared public health emergency, which was outlined in a recent op-ed by Bob Rusbuldt, Big “I” president & CEO, and others.

As the Trump administration continues to release guidance on the Payment Protection Program and other COVID-19-related relief efforts, the Big “I” will make the most up-to-date government affairs information available on the coronavirus resource page and in the weekly News & Views e-newsletter.

Joseph Cortina is Big “I” director, federal government affairs.