How Pandemics Impact Your Insurance

Pandemics and communicable disease outbreaks impact not only the population as a whole, but also the insurance industry and its consumers. While some forms of coverage are built to cover pandemics and disease, unfortunately not all of them are. As an insurance consumer, it's important to know how pandemics impact your specific coverage, if at all.

An independent insurance agent can help by reviewing your current coverages with you to double-check if you're protected during unforeseen pandemics, as well as other local or even global disasters. But first, here's a deep dive into how pandemics impact different forms of insurance.


How Business Interruption Insurance Responds to Pandemics


The COVID-19 pandemic brought up a lot of questions and frustrations about business interruption insurance and its exclusions for communicable disease outbreaks. Understandably, many business owners filed claims through their business interruption coverage during shutdowns due to the pandemic. Unfortunately, the vast majority of these claims were denied due to the nature of business interruption insurance's limitations.


  • Business interruption claims must stem from a covered loss relating to commercial property damage. In the case of pandemics or communicable disease outbreaks, there's usually no physical damage to the business that can be proven to an insurance company.
  • Even if you could prove that your specific business suffered from the disease outbreak internally, your insurance company would likely argue that it might take you a day at most to suspend operations and scrub down your interior.

It's important to review your specific business interruption policy, preferably with the help of your independent insurance agent. Unless your policy specifically lists pandemics or communicable diseases, they won't be covered.


In fact, many insurance policies have begun listing pandemics as a coverage exclusion that hadn't been listed previously. However, some states are considering passing legislation to afford retroactive business insurance coverage to affected businesses during a pandemic. But in most cases, this legislation has yet to be finalized.


Pandemics and the Insurance Industry

Not only are insurance customers strongly impacted by pandemics and communicable disease outbreaks, but the insurance industry itself is majorly impacted. Here's a glimpse at how the COVID-19 pandemic affected the insurance industry across the globe.


Pandemics Increase Consumer Interest in Life Insurance

Life insurance customers also question their coverage during pandemics and communicable disease outbreaks. And those who aren't currently covered are more likely to sign up for a new policy. Here's are a couple of  influences COVID-19 has had on the life insurance market.

  • When asked, life insurance consumers reported that unsatisfactory coverage options as well as complex underwriting conditions were most likely to cause them to switch their policies or carriers.
  • However, longer call wait times were less likely to influence carrier switches, possibly because customers understood the increased demand for remote staffing.

Life insurance became more attractive to consumers who formerly did not have coverage after the onset of the COVID-19 pandemic. In most cases, life insurance covers deaths due to communicable disease outbreaks. Also, the increased focus on early, unexpected deaths due to a pandemic sparked an increased interest in obtaining life insurance for the first time among many consumers.



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