LANGHORNE, PA— Congressmen Brian Fitzpatrick (PA-01), Gil Cisneros (CA-39), Will Hurd (TX-23), and Tom Suozzi (NY-03) introduced the Bipartisan H.R. 6497, the Never Again Small Business Protection Act, to provide small businesses access to business interruption insurance that will help keep them afloat during national emergencies. Countless business interruption insurance policyholders across the country who have been paying their premiums for many years have discovered in recent weeks that their policies do not cover government-ordered business shutdowns caused by a national emergency, in this case, the COVID-19 pandemic.
The Never Again Small Business Protection Act would require that business interruption insurance provide coverage for businesses and nonprofits for losses that stem from any federal, state, or local government-ordered business shutdown following the declaration of a national emergency. This coverage would support businesses that are impacted for at least thirty days as long as businesses keep their employees employed and maintain their health insurance coverage.
To ensure transparency for policyholders, insurers would only be able to exclude coverage for national emergencies if the insurer has received a written statement from the policyholder that affirmatively authorizes the exclusions, or if the policyholder fails to pay premiums associated with the coverage. To provide adequate stability for insurers, the government would put in place a federal backstop that would cover the costs of insurers saving the small businesses within their communities.
“Small businesses across our country are suffering through no fault of their own. During this crisis, many have been forced to lay-off employees or shut down. We must provide assurance to them that in the case of future national emergencies that they will never have to go through such excruciating uncertainty ever again,” said Rep. Fitzpatrick. “Our small businesses need our help, and they need it now. They employ over fifty percent of the American workforce and they are the backbone of our economy. I am proud to introduce this bipartisan legislation to make sure that businesses can access a policy they pay into when they need it most.”
“This pandemic has put countless small businesses in the 39th District in impossible positions, with some having to close their doors permanently. It’s frustrating that small businesses have paid for business interruption insurance only to find that it does not cover national emergencies, like our current public health crisis. We need to fix this for the future,” said Rep. Cisneros. “I’m proud to work with my Republican and Democratic colleagues to introduce a bill that addresses this issue and provides our small businesses with the certainty and help they need.”
“As the Coronavirus continues to have a devastating effect on the U.S., it becomes more and more clear that our small businesses could not have prepared for this. This virus and national emergency has crushed these businesses, and, while we have provided relief through the Paycheck Protection Program and expansion of the Economic Injury Disaster Loan program, there is more we can do to prevent future damage,” said Rep. Hurd. “The Never Again Small Business Protection Act would expand business interruption loss insurance to provide coverage for losses due to a national emergency declaration. This legislation could help millions of small businesses regardless of what type of emergency shakes our country.”
“This crisis has shown us that more needs to be done to protect our small businesses from future national emergencies,” said Rep. Suozzi.
"When so many other industries are stepping in and stepping up to help small businesses and communities, it's disappointing to see the lack of engagement on the issue of business interruption insurance,” said John Longstreet, President and CEO of the Pennsylvania Restaurant and Lodging Association. “Businesses paid for business interruption policies in the event of the unimaginable and, now that the unimaginable has happened, they are left empty-handed.”
"We, and the entire U.S. Health and Fitness Club Industry, are grateful to Rep. Fitzpatrick for introducing this common-sense legislation. America's 40,000 health clubs and 800,000 employees thoroughly support this legislation that will allow businesses to access their insurance when they need it most,” said Joe Moore, President & CEO of the International Health, Racquet & Sport Club Association. “Like an act of God, as we've recently seen, a government shutdown can devastate a business, through no fault of the business operator. This is why insurance exists. And this is why the International Health, Racquet & Sportsclub Association proudly supports this bill."
"As government travel restrictions to curb transmission of COVID-19 began to take their toll on the nation's hotel owners, we expected to rely on our business interruption insurance to help pay our bills and keep our staff employed. Hoteliers faithfully pay our premiums to have peace of mind that our livelihoods will be secure in the case of unexpected misfortune, through no fault of our own,” said Jagruti Panwala, Chairwoman of the Asian American Hotel Owners Association. “Unfortunately, so many of us have been told our policies do not cover shutdowns such as those ordered by the government in response to this pandemic. We are grateful to Congressman Fitzpatrick for working to right this wrong so that, going forward, no small business owner will be blindsided by fine print or unimaginable circumstances such as the measures taken to flatten the curve which have devastated our industry.”
The Never Again Small Business Protection Act would require the Federal Advisory Committee on Insurance to conduct a study on the feasibility of a federal backstop for small business access to business interruption insurance. Finally, for the mandate on business interruption insurance to come into effect prospectively, the Secretary of Treasury will need to certify that an adequate federal backstop has been put in place.