A New York congresswoman introduced a bill Tuesday to provide a federal backstop for coronavirus insurance claims.
Insurance is one of the key unresolved questions in Hollywood’s race to resume film and TV production. The insurance companies that typically underwrite cast insurance and other common policies have been unwilling to write new policies that would cover claims related to COVID-19.
In a press conference to announce the bill on Tuesday, Maloney said she had been in touch with entertainment industry companies to discuss the bill.
“News media, news stations, Hollywood producers — everybody needs insurance,” Maloney said. “They’ve all weighed in in certain ways.”
The bill is intended to revive the market for business interruption insurance across all industries. For now, insurers are writing COVID-19 exclusions into their new policies, meaning they will not pay out if a business is forced to close or an employee gets sick due to the virus.
The bill would not affect past policies, but would give insurers some protection in writing future policies that covered COVID-19 losses.
Under the bill, the government would pick up the tab for 95% of coronavirus-related losses, up to $750 billion. Insurers would pay the other 5%. Maloney said that industry groups representing the travel sector and retailers have been strongly in support of the bill.
The insurance industry is facing untold billions in losses from the virus, and has been unwilling to accept any portion of liability for COVID-19 claims going forward. Insurance industry trade groups have proposed that the federal government shoulder the entire burden of losses on future policies.
Maloney, a Democrat on the Financial Services Committee, said that proposal would not get through Congress, but that her bill would be subject to negotiation with the industry and with Republicans in the coming weeks.
Maloney modeled the legislation on the Terrorism Risk Insurance Act of 2002, which provided a government backstop that allowed insurers to offer terrorism-related coverage.
She argued that her bill would solve a similar market failure in coronavirus coverage.
In the entertainment world, the live events business has been hit with billions in losses, as the virus forced cancellations of concerts and sporting events.