Abstract
The COVID-19 pandemic presented many challenges and businesses were not immune. Corporations and small businesses alike faced closures due to the pandemic and related governmental shutdowns which left them desperate for the lifeboat that is insurance coverage. However, the majority of these businesses were excluded from this coverage. Business Interruption Insurance is the “ark” that keeps business afloat when they are faced with temporary closures. However, when insurers were looking for their lifeboat, they found nothing but a quickly deflating raft.
Insurance, in its most simple terms, is a contract for balancing of risks. Insurance policy exclusions are the primary tool insurers have to limit potential coverage obligations. The SARs outbreak of 2003 gave a glimpse of a potential global pandemic and the insurance industry responded by creating specific exclusions for these types of events. These exclusions are found in the vast majority of Business Interruption polices. Several States and the U.S. Federal Government all proposed legislation to either nullify these exclusions or require insurers with Business Interruption polices to offer coverage for pandemics in the future. This note analyzes these various proposals and offers a solution that seeks to balance the needs to insureds and the insurance industry going forward.
Recommended Citation
Micaylee R. Uhls,
Business Interruption Insurance: The Future of Pandemic Exclusions,
46
S. Ill. U. L.J.
131
(2021).
Available at:
https://opensiuc.lib.siu.edu/siulj/vol46/iss1/7