PIA National has been working with our industry colleagues on a proactive solution for the many businesses struggling due to COVID-19, the novel coronavirus. To that end, PIA National, along with other groups like the Reinsurance Association of America (RAA), have issued a letter to Congress and the administration, along with a proposal to provide a solution for affected by mandatory closures, quarantines, and other measures intended to slow the spread of the virus.
The proposal would create a Business and Employee Continuity and Recovery Fund within the U.S. Department of the Treasury. Modeled on the September 11th Victim Compensation Fund, the Recovery Fund would be operated by the federal government and run by a presidential appointee authorized to enter into contracts with interested businesses to administer the Recovery Fund and facilitate the distribution of financial resources to affected businesses.
The Recovery Fund would provide short-term liquidity for small businesses by creating a simple form that could be electronically filed to help businesses maintain viability and continue to pay their employees.
Insurance agents and carriers would be able to aid their clients in the Recovery Fund application process but would not be required to do so. Recovery Fund awards would be offset to the extent an applicant receives collateral payments via insurance for any applicable losses.
The Recovery Fund would protect lost wages for employees unable to work because of COVID-19 infection, quarantine, or operational shutdown; preserve jobs through payroll assistance for temporarily closed businesses that continue to retain their employees; and provide solvency assistance for businesses in danger of failing as a result of the pandemic. The Recovery Fund offers a solution to the current crisis facing small businesses and employees, without rewriting insurance contracts via legislative order.
PIA National is working with congressional allies to include this proposal in the next coronavirus legislation. We will keep PIA members updated as our advocacy efforts continue.