The U.S. Department of the Treasury has responded to letters, which PIA National strongly supported, from several House members and Senators urging the administration to oppose retroactive business interruption (BI) proposals. The letter from Treasury to policymakers noted that it shares concerns that retroactive BI proposals would undermine the contractual nature of existing insurance obligations and threaten the stability of the insurance industry.
Legislation has been introduced in the U.S. House that would empower the federal government to rewrite existing business interruption (BI) insurance provisions drafted with otherwise applicable exclusions. PIA National has expressed to Congressional offices our strong opposition to such proposals, which purport to quickly provide assistance to businesses in need, but in reality would not do so. Such a response would not help all businesses; in fact, only one in three small businesses even has business interruption coverage. As such, only a small percentage of businesses would benefit in any way from it, and thousands of small businessowners would be left struggling. Moreover, such a statutory response would lead to prolonged litigation and, during that time, would leave policyholders without the financial liquidity they so desperately need.
PIA National has been working with our industry colleagues on a proactive solution for the many businesses struggling due to the coronavirus pandemic. To that end, we have worked with over 100 business and insurance groups on a proactive solution for those affected by mandatory closures, quarantines, and other measures intended to slow the spread of the virus: the creation of a COVID-19 Recovery Fund. PIA National is an active member of this coalition and is encouraging future coronavirus response legislation to include such a fund and reject any proposed retroactive BI initiatives.