The Risk and Insurance Management Society (RIMS) has written to the US Congress and the White House pressing for a Government backstop to ensure business interruption insurance cover is available during pandemics.

RIMS proposes a pandemic insurance program similar to the arrangement for terrorism cover that would operate as a risk-sharing mechanism between the industry, policyholders and the Federal Government.

“As with traditional insurance policies, policyholders would absorb initial losses up to a specified deductible,” RIMS President Laura Langone says in the letter.

“Insurers would then provide affordable interruption coverage up to a certain limit with the government backstopping the program after that limit is exhausted.”

A RIMS survey has found 67% of risk professionals anticipate business interruption losses due to COVID-19. Some 77% expect the losses to exceed $US1 million ($1.5 million) and more than a third of that group estimates losses of more than $US25 million ($38.6 million).

The survey says 91% of respondents support a pandemic or epidemic loss-sharing program along the lines of the Terrorism Risk Insurance Act, introduced after the 9/11 attacks.

Some 65% of risk professionals also say they would be willing to pay up to 5% more in premium for the cover.

Ms Langone says Congress has responded quickly in introducing the CARES Act, which provides assistance for individuals and businesses, but there is still more to be done.

“We look forward to the opportunity of collaborating with them to develop a sound pandemic program that instils confidence in businesses and reinvigorates the economy,” she said.