According to the American Property Casualty Insurance Association, they are.


Business owners all across the U.S. have the same question, “Why isn’t my business interruption insurance policy covering the income loss I suffered as a result of the COVID-19 pandemic? If you were to ask the president of the American Property Casualty Insurance Association (APCIA) this question, he will tell you that pandemic outbreaks are uninsured because they are uninsurable. So, what is business interruption insurance really for if it doesn’t cover losses stemming from a pandemic?


APCIA Explains What Business Interruption Insurance Can Be Utilized For


The APCIA recently issued a business interruption fact sheet that explains in-depth what it believes business interruption insurance is for. The association also addresses why companies can’t afford to pay out on the growing number of claims they are receiving for COVID-19 losses.

According to the APCIA, business interruption insurance “covers financial losses (e.g., lost income, operating expenses) when a business cannot function because of physical damage to a commercial property (e.g., a fire in a restaurant kitchen).” Most of the business interruption insurance policies that were issued exclude damage incurred as a result of a virus, bacteria, or other type of disease such as COVID-19. The APCIA says that while some insurers do offer coverage for pandemic losses, it is rarely ever purchased.


Why does the APCIA say insurers cannot afford to pay out on claims stemming from the pandemic?


The APCIA says that business interruption policies “are not underwritten to include the risk of viruses, reinsurance is not purchased to cover viruses, and premiums are not calculated or collected to include viruses.” The association also says that the annual premiums for all commercial property risks average to about $6 billion per month, but losses so far range anywhere from $255 billion to $431 billion per month for small businesses with 100 or fewer employees. The association adds that “the continuity losses for small businesses are approximately 43 to 72 times the monthly commercial property insurance premiums, which includes coverage for losses as a result of such perils as fire, wind, hail, and water leaks.

While many argue that the insurance industry does have enough money to cover COVID-19-related claims as it currently has about $800 in surplus, the association says that this money is expected to cover any claims filed with home, auto, and business insurance companies.


What is the first step a business owner in Minnesota should take if their insurer denied their COVID-19 business interruption claim?


Read through your policy. If you believe your insurer wrongfully denied your claim, contact and we will help you locate a Minnesota insurance claims denial lawyer in your area who can assist with getting the issue resolved.

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