Cunningham Calls on Insurance Companies and Brokers to Make Coronavirus-Related Losses Part of their Commercial Business Interruption Coverage

March 18, 2020
Press Release

Mt Pleasant, S.C. – Rep. Joe Cunningham (SC-01) joined a bipartisan group of lawmakers today to call on insurance companies and brokers to make financial losses related to coronavirus, or COVID-19, part of their commercial business interruption coverage for policyholders. In their letter to leadership at the American Property Casualty Insurance Association, National Association of Mutual Insurance Companies, Independent Insurance Agents & Brokers of America, and Council of Insurance Agents and Brokers, the Representatives cited the many businesses in their districts who have been forced to send employees home or shutter their doors due to a loss of economic activity. They made it clear that the impacts businesses are facing due to the coronavirus plainly meet the threshold for business interruption insurance and urged insurance companies and brokers to act swiftly.

“Business interruption insurance is intended to protect businesses against income losses as a result of disruptions to their operations and recognizing income losses due to COVID-19 will help sustain America’s businesses through these turbulent times, keep their doors open, and retain employees on the payroll,” the lawmakers wrote. “During times of crisis, we must all work together. We urge you to work with your member companies and brokers to recognize financial loss due to COVID-19 as part of policyholders’ business interruption coverage.  Additionally, we stand ready and willing to work with you to on any future measures that might be necessary to see our country through this trying time.”

The full text of the letter can be found here and online.

March 18, 2020

Mr. David Sampson

President and Chief Executive Officer

American Property Casualty Insurance Association

555 12th Street, N.W. Suite 550

Washington, D.C. 20004-1264

 

Mr. Charles Chamness

President and Chief Executive Officer

National Association of Mutual Insurance Companies

20 F Street, N.W. Suite 510

Washington, D. C. 20001

 

Mr. Bob Rusbult

President and Chief Executive Officer

Independent Insurance Agents & Brokers of America

127 South Peyton Street

Alexandria, V.A. 22314

 

Mr. Ken Crerar

President and Chief Executive Officer

Council of Insurance Agents and Brokers

701 Pennsylvania Avenue N.W. Suite 750

Washington, D.C. 20004

Dear Mr. Sampson, Mr. Chamness, Mr. Rusbult, Mr. Crerar:

We, the undersigned members of Congress, write to you on a matter of pressing importance for America’s businesses.  As the world community continues to navigate the impact and response of the declared global health emergency caused by COVID-19, we urge your member companies and brokers to make financial losses related to COVID-19 and other infectious disease-related losses part of their commercial business interruption coverage for policyholders.   

There are currently more than 118,000 declared cases of COVID-19 in 114 countries around the world, and more than 4,000 individuals have lost their lives.  As the international community works to mitigate the evolving threat of this virus, America’s business are, understandably, concerned about the potential financial impact the continued global spread of COVID-19 may have on their operations. 

In many commercial property insurance policies, business interruption coverage is triggered when the policyholder sustains “direct physical loss of or damage to” to insured property.  In addition, many commercial property insurance policies provide coverage for business income losses sustained when a civil authority prohibits or impairs access to the policyholder’s premises. 

As you are no doubt aware, on Monday, March 16th seven counties in the greater San Francisco Bay Area issued “shelter-in-place” orders for area residents. On Tuesday, March 17th, New York City Mayor Bill DeBlasio said city officials are “absolutely considering” a shelter-in-place order similar to the one that took effect in the San Francisco Bay Area on Monday.  And on Monday, March 16th, New Jersey Governor Phil Murphy took the extraordinary step of announcing a statewide curfew of 8:00 P.M. for New Jersey residents. 

These “shelter-in-place” orders and curfews--combined with those individuals who have already chosen to stay in their home over fear of contracting the virus— will no doubt have an economic impact on America’s businesses, particularly its small businesses.  Many of us have already begun hearing from constituent businesses who have been forced to send employees home or shutter their doors due to a loss of economic activity.   

Business interruption insurance is intended to protect businesses against income losses as a result of disruptions to their operations and recognizing income losses due to COVID-19 will help sustain America’s businesses through these turbulent times, keep their doors open, and retain employees on the payroll.  

During times of crisis, we must all work together. We urge you to work with your member companies and brokers to recognize financial loss due to COVID-19 as part of policyholders’ business interruption coverage.  Additionally, we stand ready and willing to work with you to on any future measures that might be necessary to see our country through this trying time.

Thank you for your consideration.