In the age of coronavirus, Rep. Carolyn Maloney wants to ensure federal insurance against pandemics
WASHINGTON — If we can have terrorism insurance, why not protection for pandemics?
That's the aim of a new bill offered Tuesday by Rep. Carolyn Maloney (D-N.Y.), modeled on similar legislation passed after the 9/11 terror attacks to jumpstart a construction industry that couldn't get coverage for new projects.
In that measure, the Terrorism Risk Insurance Act, the federal government promised to backstop insurance industry losses if an attack proved too costly, and convinced insurers to write policies again.
Maloney's Pandemic Risk Insurance Act aims to do the same on a bigger scale to help businesses whose current insurance policies do nothing for a pandemic.
“Millions of small businesses, nonprofits, mom-and-pop shops, retailers, and other businesses are being left out in cold and will never be able to financially recover from the coronavirus crisis because their businesses interruption insurance excludes pandemics," Maloney said on a conference call with reporters and industry backers. “We cannot allow this to happen again."
Maloney said she hopes to get the bill passed in time to help cover losses starting in January. The proposal allows the government to backstop up to $750 billion in losses. The government would cover 95 percent of the losses above the insurance companies' deductibles, which would be set at 5 percent of the premiums they take in.
Travel, retail and entertainment industry players were backing the plan, arguing that businesses and would-be customers could use the reassurance.
"This is one important component to businesses having some comfort to reopen," said Tori Emerson Barnes, an executive at the U.S. Travel Association.
The insurance industry has been reluctant to embrace the idea, saying that the government should bear the cost of all losses in the program. Maloney said that would never pass.
She said some insurers already were interested, and predicted more would jump in because business owners want it.
“They’re bringing this up. I didn’t know that the small businesses in my district were concerned about pandemic insurance, but it comes up in every town hall I have,” Maloney said.