Opinion | A Pandemic Risk and Insurance Act Is a Great Idea
Credit to Butler University risk management professor Zach Finn for caring enough to come up with an idea that could actually do some good. As government closures over the COVID-19 threat threw a wrench into the economic activity of the U.S. and the world, Finn put his thinking cap on.
As many of us know, insurers won’t cover business interruption caused by acts of the local or the federal government. Business and school closures are a prime example.
It’s unfair that states, like New Jersey, would then turn around and order insurance companies to cover business interruption losses triggered by their very actions, well-intended though they may be.
Finn called for a Pandemic Risk and Insurance Act, echoing the Terrorism Risk and Insurance Act, which would provide a government backstop for insurers that are caught in the vice of a massive worldwide event that will produce losses in the hundreds of billions.
Rather than pitch the government against the commercial insurance industry, such an act would make them risk management partners, which they are in some instances and should be more broadly.
Finn’s idea is a good one. It’s doubtful it will be put into play as COVID-19 wreaks its havoc. But how about we get it in place as soon as possible so that we can be better prepared for the next pandemic? &