Navigating Business Interruption Insurance: Insights from Industry Leaders

Triple-I CEO Discusses Retroactive Insurance Policies

Triple-I CEO Sean Kevelighan recently participated in a panel discussion on proposed measures that could retroactively rewrite business interruption insurance policies. Kevelighan emphasized the industry's proactive measures during the COVID-19 crisis, including over $10 billion in premium relief and $200 million in charitable donations. However, he cautioned that retroactive legislation could deplete policyholder surplus, making it difficult for insurers to fulfill their obligations during future catastrophes.

Legislative Proposals and Their Potential Impact

Legislation has been discussed or introduced in several states, including Louisiana, Massachusetts, and New York, to retroactively enact business interruption coverage. These proposals could cost the industry between $150 billion and $380 billion per month, significantly impacting the surplus accumulated over centuries. Kevelighan highlighted the importance of policyholder surplus in enabling insurers to act as 'financial first responders' during large-scale disasters.

Panelists Advocate for a COVID-19 Claims Fund

The panelists, including NCOIL President Matt Lehman and Rutgers Law School professors Jay Feinman and Adam Scales, supported the creation of a COVID-19 Business Interruption and Cancellation Claims Fund. This fund, similar to the 9/11 Victims Compensation Fund, would be funded by the federal government and administered by a special federal administrator. It aims to provide liquidity to businesses affected by the pandemic, facilitating recovery and continuity.

For readers, it's crucial to stay informed about legislative changes and their potential impact on insurance policies. Engaging with industry experts and participating in discussions can provide valuable insights into navigating these complex issues.