Government Intervention: The Key to Business Survival Amidst Pandemic

Business Interruption: An Uninsurable Risk

The unprecedented scale of business interruption losses due to the global pandemic has rendered them uninsurable. Estimates suggest that the monthly losses in the U.S. alone range from $220 to $383 billion, an amount that the insurance industry cannot and should not be expected to cover. This reality has led to a growing consensus among Americans that the federal government should step in to provide the necessary financial support to keep businesses afloat during these challenging times.

Public Opinion: Government Should Bear the Responsibility

A recent poll conducted by CivicScience on behalf of Future of American Insurance and Reinsurance (FAIR) revealed that a majority of Americans believe the government should take financial responsibility for helping businesses during the pandemic. Only 16 percent of respondents thought insurance companies should bear this responsibility, and a mere 8 percent believed lawsuits against insurers were the best path for businesses to secure financial relief. This data underscores the public's recognition of the government's unique capacity to provide the relief needed.

Government-Backed Solutions: A Necessary Measure

Business interruption insurance contracts were not designed to cover global pandemic risks, and forcing insurers to pay for claims their policies were not priced to cover would harm all policyholders. A government-backed policy solution can provide immediate relief to struggling business owners and protect insurers' ability to fulfill their promises to policyholders for covered catastrophe losses, such as damage from wildfires and hurricanes. The attempts by trial attorneys to retroactively force uninsurable pandemic coverage in business interruption insurance contracts are detrimental to policyholders, communities, insurers, and economic growth. Therefore, a government-backed solution for struggling businesses has never been more urgently needed.

In conclusion, while the insurance industry plays a crucial role in economic stability, the current pandemic has exposed the limitations of their capacity to cover business interruption losses. The government's intervention is not only necessary but also widely supported by the public. For businesses, it is advisable to stay informed about government relief programs and consider diversifying their risk management strategies to better withstand future crises.