NRF Lobbies for Federal Pandemic Insurance Program
The National Retail Federation (NRF) called on Congress to pass legislation establishing a federal program that would help businesses obtain insurance coverage for pandemics, Yahoo News reported. The legislation is modeled on a program for terrorism insurance established after the Sept. 11, 2001 attacks. The NRF, along with 16 other business organizations, sent a letter to Congress supporting the Pandemic Risk Insurance Act. Representative Carolyn Maloney, a senior member of the House Finance Services Committee, plans to introduce the Act soon.
The legislation is modeled on the Terrorism Risk Insurance Act passed after the Sept. 11 attacks made it hard for businesses to receive insurance coverage against acts of terrorism. The Pandemic Risk Insurance Act is backed by committee Chairwoman Maxine Waters and developed with input from NRF, Yahoo News reported.
If passed, the Act would require that insurance companies offer policies that cover pandemics, but would create a federal backstop program that would reimburse insurers when claims related to a pandemic or epidemic exceed $250 billion nationwide. Insured businesses would have to show that they had suffered significant business interruption with a sharp decline in sales. Coverage would also be required for large gatherings that are canceled. The program wouldn't cover claims from the current pandemic, only claims from future pandemics, and would be capped at $500 billion.
Total Retail's Take: Retailers nationwide are experiencing unprecedented losses due to COVID-19, and most of these losses aren't covered by current insurance policies. A federally insured pandemic insurance program could help businesses feel more secure and confident about making future plans, especially as many start to look ahead and plan for the economy reopening, including their brick-and-mortar stores. Scientists are still unsure if the coronavirus will have a second wave and what impact that would have on society, but many are forecasting such an event. In the coming months many retailers will need to renew leases, order inventory and re-hire workers they had to furlough due to the pandemic. With something like the Pandemic Risk Insurance Act in place, it can give retailers peace of mind as they make these investments.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.