The global COVID-19 pandemic has brought significant disruptions to our economy—and for many business-owners, this has come at a cost to their income and livelihoods.

In a CNN news segment earlier today, Insurance Information Institute (Triple-I) CEO Sean Kevelighan provided insight on why pandemics are uninsurable. While the insurance industry understands the challenges the business community is facing, only the federal government has the financial capacity to provide relief of this magnitude.

According to Kevelighan:

• Forcing insurers to cover pandemic losses would jeopardize the financial solvency of the insurance industry—a backbone for the American economy. “We would see systemic strain on the industry within a matter of months that could cost anywhere from $150 to $400 billion a month.”
  

• Standard BI policies are triggered by direct physical damage to property. “A virus does not trigger the direct physical damage that’s necessary to enact a business insurance or business interruption policy. We’ve actually seen that play out already in court.”

Insurers are doing what they can in response to the pandemic, including providing premium rebates, policy extensions, and making charitable donations, as they work to keep their promises to policyholders for covered catastrophe losses such as hurricane damage.

The CNN segment is available here. For more information and resources, visit fairinsure.org