Caribbean Catastrophic Risk Insurance Facility: a solution to the short-term liquidity needs of SIDS in the aftermath of natural disasters
Among the challenges facing the governments of small island states in the aftermath of disasters is the need for short-term liquidity to start recovery efforts while maintaining essential government services. This challenge is particularly acute for Caribbean governments whose economic resilience is limited by the combination of soaring vulnerability and high levels of indebtedness. The Caribbean Catastrophe Risk Insurance Facility was recently established to provide the Caribbean Community (CARICOM) government with an insurance instrument to address this need. This instrument, akin to business interruption insurance, will provide them with short-term liquidity if hit by a hurricane or earthquake.
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