Trump Tells Insurers to Pay Virus Claims If Pandemics Not Excluded
R Street, a public policy organization that supports free markets, issued a statement after the coronavirus briefing saying that Trump is “misinformed.”
R.J. Lehmann, director of finance, insurance and trade for the non-profit group, said business-interruption coverage is designed to provide revenue protection for businesses whose properties suffer physical loss from natural causes like fires or windstorms or human-caused events like vandalism or terrorism.
“Standard commercial insurance policies typically do not even provide business interruption coverage for power loss unless there is demonstrable damage to the insured property,” Lehmann stated. “There may be unusual cases in which nonstandard contracts contain language that would cover pandemic-related shutdowns, but the industry as a whole has intentionally excluded this risk because it is far too correlated across geographies and sectors.”
Lehman said any attempt by government to rewrite the terms of coverage restrictively threatens the solvency of the insurance industry and its ability to pay legitimate claims.
“That includes both claims that do arise from COVID-19, such as workers’ compensation claims for medical workers and first responders, and unrelated claims for wildfires, hurricanes and other disasters that we can expect in the months ahead,” he said.
Image credit: Corona Borealis Studio
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