Earlier this month, former insurance regulator and legislator Howard Mills added his take to the current debate surrounding business income (interruption) insurance (BI). Mills argues that the important role of insurers in driving the economic recovery should not be jeopardized by proposals to retroactively rewrite BI policies. 

“These legislative efforts to abrogate insurance contracts, if successful, would destroy the property/casualty insurance industry, turning COVID-19 into something it is not: a solvency-threatening event for the American P/C industry.”

As the former New York state superintendent of insurance and former deputy minority leader of the New York State Assembly, Mills has a unique insight into both the insurance and policymaking worlds. He argues:

• Pandemics are uninsurable. “Pandemic is an excluded loss in the standard business interruption insurance policy because it is an uninsurable event. Business interruption insurance covers financial losses, such as lost income or operating expenses, when a business cannot function because of physical damage to a commercial property—think fire, hurricane, tornado or damage caused by civil unrest.”
  

• Efforts to rewrite BI policies would delay the recovery from COVID-19. “What those who would retroactively force insurers to cover pandemics through BI policies need to understand is that this would devastate industry surplus and jeopardize the financial stability of the property/casualty industry and further damage the U.S. economy and delay the recovery.”
  

• Proposals to force insurers to pay for uncovered risks are grounded in a lack of understanding of insurance, and would only serve to enrich trial lawyers. “As a former New York state legislator and superintendent of insurance, I was not surprised to see these ill-conceived attempts to hold insurers liable for risks they had not insured. The ‘deep pockets’ of insurers are a tempting target for those who may not have a deep understanding of how risk-transfer works—or in the case of trial lawyers, simply represent a gold mine of personal gain.”
  

Read Howard Mills’ full column here, via Best’s Review.