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1 1 (May 11, 2020)

handle is hein.crs/govdaeq0001 and id is 1 raw text is: i% 'N\ r Business Interruption Insurance and COVID-19: Federal Legislative Initiatives May 11, 2020 Many businesses across all sectors are experiencing disruption and incurring losses from the Coronavirus Disease 2019 (COVID-19) pandemic. The pandemic has stirred a debate among insurers, policyholders, and other stakeholders about who will be responsible for the losses that companies face from widespread shutdowns. This Insight will focus on efforts at the federal level to address business interruption (BI) insurance coverage for COVID-related shutdown losses. Insurance is primarily regulated at the state level, and there are efforts in a number of states providing for coverage of BI claims on a retrospective basis, which are addressed in CRS Insight IN 11382, Business Interruption Insurance and COVID-19: State Legislative Initiatives. More detail on BI insurance itself can be found in CRS Insight IN 11295, Business Interruption Insurance and COVID-19. Many policyholders who purchased BI are submitting claims to their insurers. However, insurers are largely reluctant to cover COVID-related losses. Both individual insurance carriers and the industry as a whole have asserted that BI claims related to COVID-19 are not covered, particularly as many BI policies expressly exclude coverage for viruses. The disputes largely center on the extent to which COVID-related impacts are covered by BI policies. Most disputes are not likely to be resolved quickly, leading to calls for a legislative response. For example, the Business Intermption Group, a new non-profit organization representing the restaurant industry, presented their case to the Prcsident, and he expressed support for businesses in their claims against insurers at the White House coronavirus briefing on April 10. The insurance industry has expressed the view that forcing insurers to cover such claims would potentially redistribute billions of dollars of economic losses caused by COVID-19, and would put too much financial strain on insurers that did not price premiums to reflect virus-related losses since they were excluded from policies. They argue that any attempt retroactively to cover BI policies could make it impossible for insurors to provide affordabic coverage in the future. Federal Actions Related to Business Interruption Insurance Abipartisan group of18 House Mernlbers sent a letr on March 18, 2020, to CEOs of the four major insurance trade organizations, calling upon them to cover BI losses due to COVID-19. Those Congressional Research Service https://crsreports.congress.gov IN11383 CRS NS GHT corrrn~ltes nfcrgle;

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