Experts Agree: Standard Business Interruption Policies Exclude Pandemics
July 15, 2020

Recently, there has been a surge of policy proposals calling for action from the federal government to provide financial relief to businesses that have suffered losses due to the COVID-19 pandemic. This policy debate—happening among the insurance industry, policymakers, and other stakeholders—is critical as only the federal government has the financial capacity to cover losses from pandemics and to protect businesses from similar future events.
As a reminder, standard business interruption (BI) policies necessitate direct physical damage to cover claims and were never meant to cover pandemics, considering the scale of such an event. Forcing insurers to cover these losses would jeopardize the industry’s solvency and hence its ability to meet its promises to policyholders.

Here’s what stakeholder experts have said on the exclusion of pandemics from BI insurance:

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