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Washington, D.C. – Businesses large and small plan for the known and insure against the unknown. This year, the on-going pandemic exposed weaknesses in several fundamental lines of insurance. To help address market inadequacies before it stifles further recovery, the National Restaurant Association recently joined with a broad range of industries and business owners, to form the Business Continuity Coalition (BCC) and submitted an outline of what an optimal insurance backstop for pandemic risk should include to the a U.S. House of Representatives subcommittee.
“For years, restaurants have paid into their business interruption insurance only to have their claims denied when they were forced by the states to shut down in the pandemic,” said Shannon Meade, vice president of public policy and legal advocacy for the National Restaurant Association. “Now, restaurants and many other businesses are struggling to find insurers willing to offer the coverage. For industries across the country to eventually begin to recover, they will need a web of insurance that will indemnify them against pandemic risk now and in the future.”
The Association told the House Financial Services Subcommittee on Housing, Community Development and Insurance on November 14 that, just as private insurance companies were unwilling to take on terrorism risk following 9/11, insurance companies are unwilling and unable to take on the amount of risk posed by a future pandemic. To meet the market’s current need, the Association supports the creation of a public-private insurance program similar to the Terrorism Risk Insurance Act (TRIA). In the event of a government-declared pandemic health emergency, this kind of backstop would enable employers to keep payrolls and supply chains intact, help limit job losses and furloughs, reduce stress on the financial system, and speed economic recovery when government-imposed limitations on operations are lifted.
To ensure that any pandemic risk insurance program meet the needs of a broad range of groups it should adhere to defined principals, including:
“Restaurants owners are chasing their American dream. They work long, hard hours building a business that supports and defines their community,” said Meade. “The social nature of their business is making it impossible for them to find the insurance they need to protect against pandemic losses. Without this public-private insurance backstop, the nation’s second largest private-sector employer will struggle to recover or grow.”
Find out more about how businesses have been impacted by the failure of the business interruption insurance during the pandemic and detailed BCC recommendations for creating a backstop here.
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Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 1 million restaurant and foodservice outlets and a workforce of 15.6 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We sponsor the industry's largest trade show (National Restaurant Association Show); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart). For more information, visit Restaurant.org and find us on Twitter @WeRRestaurants, Facebook and YouTube.
Contact: Vanessa Sink (202) 331-5900