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Retail Industry Updates

New York Retail Owner Testifies on Behalf of Pandemic Risk Insurance Act


New York City business owner Ann Cantrell was demoralized after learning her business insurance did not cover the lost revenue the business endured after being forced to close because of the coronavirus.

That’s why Cantrell, who owns and operates a gift shop named Annie’s Blue Ribbon General Store in Brooklyn, recently testified on behalf of the National Retail Federation (NRF) to call on Congress to approve legislation that would help businesses obtain insurance coverage for future pandemics.

“When my team and I discussed closing on Friday, March 13 — yes, Friday the 13th — I immediately called my insurance company,” Cantrell said in a press release issued by NRF. “However, harsh reality soon set in. I quickly learned that viruses and pandemics were excluded from insurance policies like mine years ago and even though we were ordered to close our business by the governor, there would be no relief from our insurance company. As I read back through the e-mail conversations, my heart just sinks at the desperation in my tone as I slowly realized what was happening.”

Cantrell said her claim was denied even though she pays over $6,000 a year for business insurance, including a business interruption clause she thought would cover lost income in “crisis situations.”

“The past few months have been the darkest in my life,” she said. “Navigating the uncertainty of a business I have dedicated years of my life to has been so sad and stressful.”

Cantrell testified before the House Financial Services Committee during an online subcommittee hearing on the Pandemic Risk Insurance Act (PRIA). Developed with input from NRF and sponsored by Representative Carolyn Maloney, D-N.Y., the legislation is modeled on the Terrorism Risk Insurance Act, which was enacted after the attacks of Sept. 11, 2001, made it difficult for businesses to obtain insurance coverage against acts of terrorism.

The new measure would require that insurance companies offer business interruption policies that cover pandemics. It would also create a federal backstop program that would reimburse insurers when claims related to a pandemic or epidemic exceed $250 million nationwide.

Covered businesses would have to demonstrate that they had suffered significant business interruption with a sharp decline in revenue. Coverage would also be required for large gatherings, ranging from sporting events to concerts to conventions, that are canceled. The program would cover only future pandemics, not claims from the current COVID-19 pandemic, and would be capped at $750 billion.

Cantrell, who eventually obtained a Paycheck Protection Program loan and was able to reopen this summer after being closed for three months through Easter and Mother’s day, said she lost nearly half of the more than $300,000 in sales she made during the same period last year.

While PRIA would cover only future pandemics, Cantrell said it “still needs to be passed as soon as possible because we never know when the next pandemic will come — we certainly didn’t see this one coming.”

She also urged Congress to pass some form of aid for businesses affected by COVID-19 in the meantime.