FERMA Task Force Looks To Address Nondamage Business Interruption
May 08, 2020
The Federation of European Risk Management Associations (FERMA) has launched a task force to create proposals for addressing business interruption coverage for catastrophic risks that don't cause physical damage.
In a statement, Dirk Wegener, FERMA's president, said, "Our aim is to support the creation of economies that are resilient in the face of systemic and catastrophe risks."
The task force, which includes senior risk managers from FERMA members, plans to publish its initial results by the end of May. FERMA and its member associations hope to create a dialogue on the subject with relevant stakeholders including European Union institutions, insurers and brokers, and government bodies.
FERMA is calling for discussions among the stakeholders aimed at creating a holistic solution that provides coverage for nondamage business interruption resulting from all types of catastrophic risks, not just pandemics.
"FERMA's member associations are composed of people with great knowledge of business risk management and business insurance," Mr. Wegener said. "We intend to draw on that expertise to make concrete proposals to form the basis of discussions with stakeholders."
FERMA contends that the impact of catastrophic events like the COVID-19 pandemic are beyond the resources of the private insurance industry and enterprise risk management alone. While the absence of business interruption coverage without a requirement for physical damage is critical for all businesses, it's particularly so for small and medium-sized enterprises, the FERMA statement said.
"Any catastrophe mechanism for business interruption must be able to respond to various types of disaster, address the complexities of catastrophes, and avoid the pitfalls of existing schemes," said Mr. Wegener.
May 08, 2020