The economic damage from future business interruption events – such as pandemics and other national emergencies – needs to be limited and managed with a new national business continuity insurance program, according to a broad business coalition launched this week that represents more than two dozen industries and over 50 million workers.
- The Business Continuity Coalition (BCC), which includes The Real Estate Roundtable, announced on Oct. 28 that it aims to develop a public/private business continuity insurance program with policymakers and other stakeholders. Such a program would enable employers, in the event of a government-ordered shutdown, to keep payrolls and supply chains intact; help limit job losses and furloughs; reduce stress on the financial system; and speed economic recovery when government-imposed limitations on operations are lifted. (BCC launch news release)
- The BCC membership is comprised of organizations from the hospitality, restaurant, entertainment, gaming, communications, and broadcasting industries, as well as the apartment, healthcare, industrial, office, and retail real estate sectors. (See full list of BCC members)
- Roundtable President and CEO Jeffrey DeBoer commented, “The need for a future national program that supports readily available business continuity insurance is clearly needed as the American business community, including commercial real estate, continues to adapt to the economic damage brought on by the pandemic.”
- He added, “Businesses are making the health of workers and customers their top priority as they face interruptions, closures and attempts at reopening. The Business Continuity Coalition will work with lawmakers in applying lessons learned from present challenges toward future solutions so that the nation can collectively bridge any future economic interruption gap with the support of a congressionally-approved national program.”
Nov. 19 Hearing on Pandemic Insurance
DeBoer on Sept. 25 discussed prospects for developing and enacting a federal pandemic risk-business continuity insurance program with Rep. Steve Stivers (R-OH), above, in a remote interview. (Video of the discussion)
- Rep. Stivers, is the Ranking Member on the House Committee on Financial Services’ Subcommittee on Housing, Community Development and Insurance, which has scheduled a Nov. 19 hearing on “Insuring against a Pandemic: Challenges and Solutions for Policyholders and Insurers.”
- “We’ve seen business interruption insurance not being willing to cover any pandemics. I think you’re going to start to see lenders … requiring some type of pandemic coverage in their loan covenants in the coming years” Stivers said.
- He added, “I think we need to make sure that if this ever happens again and the government shuts down the economy, [Congress] holds people harmless and businesses harmless in the future.” (Video of the discussion)
- Carolyn B. Maloney (D-NY), who also serves on the subcommittee, said, “Congress needs to be proactive in helping businesses protect themselves from economic losses as a result of pandemics, which, as we’ve seen, can be devastating to businesses of all sizes.” (BCC)
- The subcommittee played a key role in last year’s seven-year extension of the Terrorism Risk Insurance Act (TRIA).
- According to the BCC, there are a number of successful models that can provide guidance in structuring a business continuity insurance program. Among them are TRIA, originally enacted following the 9/11 attacks and the War Damage Corporation developed during World War II. (BCC news release, Oct. 28)
BCC Steering committee members include the American Resort Development Association, Building Owners and Managers Association, Fox Corporation, Independent Film & Television Alliance, International Council of Shopping Centers, Motion Picture Association, NAIOP – Commercial Real Estate Development Association, Nareit, National Association of Realtors, National Restaurant Association, Sony Pictures Entertainment, The Real Estate Roundtable, and ViacomCBS.
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