Meeting Mentor Magazine

December 2021

New Bill Would Require Event Cancellation Insurance to Include Infectious Disease Coverage

It seemed like a good idea to many meeting and event organizers when Congresswoman Carolyn Maloney (D-NY) first introduced legislation in May 2020 that could enable event organizers to be covered by their event cancellation insurance for losses due to infectious diseases such as COVID-19. While that version died on the vine, Maloney last week reintroduced the Pandemic Risk Insurance Act of 2021 (PRIA).

The new version was launched to help event planning, hospitality and other businesses prevent economic losses from future pandemics by requiring insurance companies to offer parametric non-damage business interruption insurance policies that cover pandemics. It also would create a Pandemic Risk Reinsurance Program to ensure that there is sufficient capacity to cover these losses and protect the economy in the event of a resurgence of COVID-19 or future pandemics. Like the Terrorism Risk Insurance Act (TRIA), the federal government would serve as a backstop to maintain marketplace stability alongside private industry.

While some likely will object to the bill, the Business Continuity Coalition (BBC) applauded the reintroduction of PRIA as necessary to ensure the economy is protected against pandemic risk moving forward. “PRIA would create a federal backstop that ensures the availability of pandemic risk coverage in all critical commercial lines of insurance, helping the country prepare and respond to any future government-imposed shutdowns of the economy caused by pandemics. The BCC urges strong bipartisan support for this critical issue,” the BBC said in a statement.

The Exhibitions and Conferences Alliance (ECA) also endorsed PRIA as a way to help restore communicable disease coverage within event cancellation insurance. ECA, a coalition of nine professional groups, industry associations and labor organizations dedicated to the recovery and advancement of the face-to-face business events industry, said in a letter to Rep. Maloney, “Prior to the pandemic, our industry contributed $396 billion annually to U.S. gross domestic product (GDP) and supported 6.6 million jobs… In addition, it is important to recognize that small businesses are the backbone of the face-to-face business events industry. More than 99% of convention and trade show organizers are small businesses, and prior to 2020, our events hosted 1.7 million exhibitors nationwide annually, 80% of which were small businesses themselves.”

ECA points to data from the Center for Exhibition and Industry Research (CEIR) that found the business-to-business events sector was still down 78.5% from pre-pandemic levels as of June 30, 2021. It also said that the inability of event organizers to get coverage for future communicable disease outbreaks in event cancelation insurance is a critical factor slowing the recovery of the industry.

“With expenses for business events starting to accrue one year or more in advance, many organizers, including smaller organizers and non-profit organizations, are financially unable to take on the risk of putting on uninsurable events,” said ECA Co-presidents David Audrain, CEM, and David Dubois, CMP, CAE. “ Your PRIA legislation would help remedy the current collapse in the event cancellation insurance market by establishing a public-private backstop that ensures our industry, and the U.S. economy more broadly, is properly protected against pandemic-related risk going forward.”

PRIA, which would require insurers to offer coverage in return for a government indemnification of 95% of insured losses arising from future pandemics resulting in a public health emergency, also was hailed by Michelle Mason, CAE, president and CEO of the American Society of Association Executives (ASAE). “PRIA’s coverage for event cancellation is especially critical to our association community whose lifeblood courses from in-person events of all sizes and scope,” she said.

US Travel also is on board. “It’s clear that without significant reforms to the business interruption and event cancellation insurance markets, travel businesses will not be able to get the type of coverage they need to reduce economic uncertainty and build a stable path to recovery,” said Tori Barnes, U.S. Travel Association Executive Vice President for Public Affairs and Policy. “The sooner we stabilize the market for pandemic risk insurance, the sooner travel businesses can get back to business.”

Chip Rogers, President and CEO of the American Hotel and Lodging Association (AHLA) agreed that PRIA “would help ensure America’s travel industry has a critical safety net in the event of a future pandemic,” he said. “Had this bill been law before COVID-19, hotel owners could have purchased affordable insurance that would have helped keep thousands of workers employed and offset the billions in economic losses hotels have experienced since. COVID-19 is the worst economic event in the history of the American lodging industry, and this bill would provide crucial protection for hotel employees and small business owners if our nation ever faces another pandemic.”

Read the full text of the bill here.

 

 

 

 

 

 

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About MeetingMentor
MeetingMentor, is a business journal for senior meeting planners that is distributed in print and digital editions to the clients, prospects, and associates of ConferenceDirect, which handles over 13,000 worldwide meetings, conventions, and incentives annually. www.meetingmentormag.com

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