"Insurance coverage works by spreading risk, but that model simply cannot account for a situation in which losses are catastrophic and nearly universal," the collective wrote in a letter dated April 2, Roll Call reported. "Standard business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19, and as such, were not actuarially priced to do so."
The groups added, "Our organizations stand ready to work with Congress on solutions that provide the necessary relief as soon as possible. The loan programs instituted by the CARES Act provide a down payment on economic support for Main Street businesses, but additional liquidity will be required for impaired industries and businesses to avoid an unprecedented systemic, economic crisis."
The CARES Act refers to the Coronavirus Aid, Relief and Economic Security Act, the $2.2 trillion stimulus package Congress recently passed to help stimulate the country's economy, which was sent into tailspin by the pandemic.
California Reps. Gil Cisneros (D) and Mike Thompson (D) were the recipients of the letter. The congressional duo co-signed a letter of their own on March 31 that was backed by a large bipartisan group of more than 30 other California lawmakers. The letter reportedly asked Ricardo Lara, California's insurance commissioner, to force insurance companies to honor business interruption clauses after small businesses reported that many companies refused to do so.
"I’m disappointed that insurance companies are unable to cover losses — as a result of our historic global pandemic — under business interruption insurance," Cisneros said in a statement at the time, according to Roll Call. "We’ve seen too many small businesses shut down, reduce staff members, or drastically limit service."