On November 2, Rep. Carolyn Maloney (D-NY) introduced a bill in the U.S. House of Representatives to create a backstop that would help event hosts recoup financial losses resulting from a pandemic or public-health emergency in the future. The bill was immediately endorsed by the American Society of Association Executives.
Known as the Pandemic Risk Insurance Act of 2021 the bill directs insurance companies to provide pandemic coverage for event-cancellation losses, and also offers federal reinsurance assistance in the event that such losses exceed $250 million industrywide. Given that research from the Professional Convention Management Association finds that associations derive approximately 35 percent of their annual revenues from conferences and events, such insurance would be a safeguard to associations’ financial health.
Case in point: A December 2020 survey by the ASAE Research Foundation found that 79 percent of respondents had no event cancellation coverage for communicable diseases in 2020, and 10 percent reported insufficient reserves to cover losses from canceled events.
“Millions of small businesses, nonprofits, associations, and event companies across the country were left in the cold during the coronavirus pandemic through no fault of their own,” said Rep. Maloney (pictured here) after she introduced the bill in the House. “A public-private framework would guarantee that insurance markets serve these organizations in the next pandemic. I want to thank ASAE for its support of PRIA.”
ASAE has called for a pandemic-risk insurance solution since the worldwide Covid outbreak first shut down business travel and events in March 2020. ASAE joined the Business Continuity Coalition in May 2021, which represents a broad range of business-insurance policyholders and works with policymakers to develop programs that protect jobs, associations, and businesses amid major public-health emergencies.
“Coverage for event cancellation is especially critical to our association community, whose lifeblood comes from in-person events of all sizes,” said ASAE President and CEO Michelle Mason, FASAE, CAE (pictured here). “This bill will help provide associations the security they need to fully reignite our community’s far-reaching economic impact through industry-focused conferences and events, among other crucial services.”
However, the insurance industry is not keen to Maloney’s proposal. In a joint press release, the National Association of Mutual Insurance Companies, the American Property Casualty Insurance Association, and the Independent Insurance Agents & Brokers of America stated that such a program “with an industry financial role, does not square with the fundamental notion that pandemics are not insurable risks.”
