PIA National — like most of us — likes the idea of business interruption legislation that assists small businesses. The two bills Congress is kicking around do not fit what the association thinks would help them.
Currently being discussed is the Business Interruption Relief Act (H.R. 7412). It was introduced by California Democrat Rep. Mike Thompson. It creates a voluntary program for insurers that allows them to retroactively pay business interruption claims.
The federal government then makes them whole by reimbursing insurers for the costs.
PIA National Vice President of Government Relations Jon Gentile said the PIA opposes this legislation as it did similar legislation introduced this spring.
“The bill purports to quickly assist businesses in need, when it is not designed to help all or even most small businesses. Only about 30 percent of small businesses even has business interruption coverage,” Gentile pointed out. “As such, only a small percentage of businesses would benefit in any way from this bill, and thousands of business owners would be left struggling.”
Gentile and PIA National are also worried about paying business interruption claims retroactively. In a story on the PIA National website, the association said, “Such legislation would call into question the reliability of commercial contractual relationships and threaten the financial stability of the insurance sector. And the downstream effects of such a law, which could set a precedent for legislative rewriting of all kinds of contracts, could be unintentionally catastrophic across multiple economic sectors.”
PIA National is urging Congress to reject any bill that retroactively rewrites business interruption provisions of a policy. The PIA wants Congress to instead, “focus on assistance that will offer sustainable solutions to the vast majority of affected small businesses.”
Source link: PIA National