PIA National Opposes Business Interruption
Reps. Mike Thompson (D-CA) and Brian Fitzpatrick (R-PA) that would empower the
federal government to rewrite existing business interruption (BI) insurance
provisions drafted with otherwise applicable exclusions.
"PIA is deeply engaged in wide-ranging efforts to assist the business community
during this national crisis. Unfortunately, these two bills would apply business
interruption coverage where it doesn’t exist, exacerbating existing disruptions
and further delaying our nation’s economic recovery," said PIA National Executive
Vice President & CEO Mike Becker.
BI provisions typically do not cover losses resulting from risks like the
coronavirus. Retroactively rewriting contracts undermines existing contractual
relationships and risks injecting new uncertainties into our current economic
crisis. Such proposals purport to quickly provide assistance to businesses in
need, but in reality, such a response would not help all businesses; 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.
"PIA believes policymakers should pursue legislative solutions that raise up all
struggling businesses, not create statutory winners and losers. Proposals that
deprive about two-thirds of all small businessowners of financial assistance are
unacceptable," said PIA National Vice President of Government Relations Jon Gentile.
"Policymakers should ensure all small businesses receive relief during this
challenging time. To that end, PIA has been working with others in the business
community to develop the Business and Employee Continuity and Recovery Fund."
The COVID-19 Business and Employee Continuity and Recovery Fund (Recovery Fund)
would be housed within the U.S. Department of the Treasury. Modeled on the September
11th Victim Compensation Fund, the Recovery Fund would be operated by the federal
government and run by a presidential appointee authorized to enter into contracts
with interested businesses to administer the Recovery Fund and facilitate the
distribution of financial resources to affected businesses.
The Recovery Fund would provide short-term liquidity for small businesses by creating
a simple form that could be electronically filed to help businesses maintain solvency
while continuing to pay their employees. The Recovery Fund would protect lost wages
for employees unable to work because of COVID-19 infection, quarantine, or operational
shutdown; preserve jobs through payroll assistance for temporarily closed businesses
that continue to retain their employees; and provide solvency assistance for businesses
in danger of failing as a result of the pandemic.
"The Recovery Fund offers a solution to the current crisis facing small businesses and
their employees, without rewriting insurance contracts and without depriving about two
thirds of all small businesses of help. PIA rejects this limited business interruption
proposal and calls on Congress to instead make policy that aids all suffering businesses
during this difficult time by passing the Recovery Fund into law," said Gentile.