Insurance groups unveil the Business Continuity Protection Program
The proposed federal program would help businesses meet the financial challenges from future pandemics.
Without a doubt, no other disaster in the modern age has impacted businesses the way the COVID-19 crisis has in just a matter of weeks. And the prospect of facing another pandemic in the future is a terrifying one.
In response to the immense financial challenges facing U.S. operations, the National Association of Mutual Insurance Companies (NAMIC), the American Property Casualty Insurance Association (APCIA), and the Independent Insurance Agents & Brokers of America (Big “I”) proposed a new customer-focused federal program to help businesses meet the financial challenges from future pandemics.
Named the Business Continuity Protection Program (BCPP), the solution would provide revenue replacement assistance for payroll, employee benefits, and operating expenses following a presidentially-declared viral emergency.
“Pandemics simply are not insurable risks; they are too widespread, too severe, and too unpredictable for the insurance industry to underwrite,” Charles Chamness, NAMIC’s president and CEO, said in a statement. “As we’ve seen in the past few months, pandemics are a national problem, and we need a national solution. NAMIC, APCIA, and the Big ‘I’ had one goal in mind in developing the BCPP — crafting a solution that would provide meaningful support for employees, businesses, and the economy as a whole.”
Although there’s been recent speculation around the creation of legislation similar to the Terrorism Risk Insurance Act for pandemic risk, “a TRIA-like program, with an industry financial role, does not square with the fundamental notion that pandemics are not insurable risks,” the organizations said in a release. ”The risks are too fundamentally different in nature and scope.”
“We need a sustainable solution that provides simplicity, certainty, and immediate relief to impacted businesses,” said David Sampson, APCIA’s president and CEO.
Big “I” President and CEO Bob Rusbuldt added, “The BCPP is a simple, efficient, and effective plan to provide the needed financial security for American businesses. This program gets immediate funding to businesses when they need it most.”
BCPP’s provisions
The chief purpose of the BCPP would be to reimburse businesses with up to 80% of payroll, benefits, and expenses for three months in the event of another pandemic.
For businesses to access the program’s benefits, they must purchase their desired level of revenue replacement assistance through state-regulated insurance entities that voluntarily participate in the BCPP. Under the BCPP, FEMA would provide the critical mechanism of administering relief to businesses. And the BCPP would be able to purchase private reinsurance to protect federal taxpayers.
Read more about the BCPP here.
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