H.R. 6497 Pending - ever Again Small Business Act requires that insurers offering business interruption coverage must offer additional coverage for losses that result from business interruption due to a government order to close during a national emergency. This coverage does not apply to losses incurred by an otherwise qualified business if that business involuntarily terminated the health care or the employment of an employee during the national emergency period. An insurer may exclude this additional coverage from a contract for business interruption coverage if the insured agrees in writing, or if the insured fails to pay the corresponding premium increase. This bill is effective only upon certification by the Department of the Treasury that a federal backstop exists to serve as a mechanism to reinsure insurers against excessive losses as a result of these requirements.
H.R. 7412 Pending - Would establish a temporary voluntary program for support of insurers providing business interruption insurance coverage during the COVID-19 pandemic.
The Business Interruption Insurance Coverage Act of 2020: The bill has bipartisan support and, if passed, would require each insurer "that offers or makes available business interruption insurance coverage" to "make available, in all of its policies providing business interruption insurance, coverage for losses resulting from . . . any viral pandemic . . . any forced closure of businesses, or mandatory evacuation . . . or . . .any power shut-off conducted for public safety purposes." The bill further provides that any exclusions in force on the date of the enactment of the act "shall be void. to the extent" they exclude the above -specified losses. Policy exclusions may be reinstated if authorized in writing by the insured or if the insured fails to pay any increased premium charged by the insurer for providing the business interruption coverage. Insurers must provide 30 days' notice of the increased premium or reinstatement of the exclusions.
The Pandemic Risk Insurance Act Of 2020 would establish a federal backstop for business interruption and event cancellation losses resulting from a future pandemic or public health emergency declared on or after January 1, 2021. It would not apply retroactively to the instant COVID-19 pandemic. Insurers who do participate would offer pandemic-related business interruption and event cancellation coverage, and they would be reimbursed by a federal backstop for some of their losses. No losses would be paid under the program until aggregate industry insured losses exceed a $250 million aggregate trigger.
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