In light of the systemic challenges businesses have faced related to the business interruption insurance market during the COVID-19 crisis, H.R.7011, the Pandemic Risk Insurance Act (PRIA) of 2020, was introduced by Rep. Carolyn Maloney (D-NY) on May 26. The legislation creates a Pandemic Risk Reinsurance Program that would establish a system of shared public and private compensation for business interruption losses resulting from future pandemics or public health emergencies. The sponsors have released a section-by-section summary of the bill as well.
PRIA is modeled on the successful Terrorism Risk Insurance Act (TRIA), which has been integral in encouraging insurers to cover acts of terrorism, a similarly difficult to insure incident. The Pandemic Risk Reinsurance Program that would be created under H.R.7011 is also intended to be flexible for insurers to hopefully ensure that policyholders are not burdened by mandatory expenses that will be passed down by their insurance providers.
IWLA endorsed H.R.7011 in a June 2 letter and is closely working with the bill sponsor to generate additional support for the legislation on Capitol Hill. While many 3PL warehouses have remained in operation to provide essential services throughout the crisis, there have been interruptions in operations due to facility sanitization and reducing production lines to minimize employee contacts. Additionally, 3PL providers with customer concentration in industries shuttered during the crisis, such as in the case of the automotive industry, have also experienced a significant negative impact due to business interruptions.