Bloomberg Article Reaffirms Necessity Of Government-Backed Pandemic Relief

Yesterday, Bloomberg published an article on the prospects of a government-backed pandemic insurance program, providing an overview of what stakeholders around the world are doing to advance this conversation. This timely piece highlights the importance of finding such a solution, as many businesses—especially small ones—continue to face economic strains during these challenging times.
Key takeaways from this article include:

  • Forcing insurers to cover pandemic-related business income losses would threaten the solvency of the insurance industry. “At the core is the reality that the global non-life insurance industry’s $2 trillion in capital won’t last in a ‘black swan’ event, such as a cyber attack or another pandemic, that hobbles the global economy.”
  • Given the scale of a pandemic, only the government has the financial capacity to cover such a risk, as insurers brace for greater climate change risks. “Anything as large as pandemic risk, the industry argues, will need government support. The coronavirus has shut down global economies in a way that very few prepared for, with revenue for millions of businesses cut or totally lost as they were forced to shut their doors. But it’s far from the only possible threat.”
  • Stakeholders—including policymakers and stakeholders—have been pushing for governmental action through policy proposals. “Lawmakers in the U.K., the European Union and the U.S. are grappling with ways for taxpayers to help in a more predictable way than hastily assembled bailouts. Insurance giants including Chubb Ltd., Axa SA and Lloyd’s of London are pushing for action before the lessons of 2020 fade.”

If interested, the article can be found here. For more information and resources, go to


Iowa Federal Court Affirms Insurers’ Position In A Business Interruption Case Ruling

The U.S. District Court for the Southern District of Iowa ruled in favor of the insurer in a lawsuit on pandemic-related business interruption (BI) claims due to lack of alleged physical property loss or damage that would trigger coverage.
According to Judge John A. Jarvey:

  • Direct physical loss necessitates tangible alteration of property, not the loss of use of property due to mandatory closures. “The closure orders amounted to a direct physical loss because they were prevented from doing normal business, [plaintiffs] said. Jarvey rejected this theory. ‘It is a settled matter in Iowa law that direct physical loss or damage requires tangible alteration of property and that loss of use alone is insufficient,’ he said.”
  • The virus exclusion in policyholders’ BI policy clearly prohibits coverage, even if statewide shutdown orders cause physical damage. “This virus exclusion lets [insurer] off the hook even if the [plaintiffs] could show that Covid-19 or statewide shutdown orders actually altered their property, he said. ‘The Virus Exclusion unambiguously states it will not pay for loss or damage that is directly or indirectly caused by any virus, regardless of any other cause or event that contributes to the loss.'”

This lawsuit is part of a nationwide litigation trend we’ve seen in recent months, led by trial attorneys, attempting to retroactively alter BI contracts to cover pandemic-related income losses—a misguided effort that places the interests of attorneys ahead of business owners’ and jeopardizes insurers’ ability to meet promises to policyholders on covered claims. The Iowa ruling adds to the growing list of favorable rulings affirming insurers’ position that global pandemic risks are uninsurable.
The full article is available here. For more information and resources, visit