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In reply to the discussion: U.S. insurers want taxpayers to back pandemic coverage for businesses [View all]Xolodno
(6,390 posts)Current Business Insurance classifies pandemics as an excluded coverage. And there are probably lawsuits flying all over the place anyway to force them to cover the business interruption anyway, but I find it highly unlikely they will succeed. It will probably go all the way to the Supreme Court as almost all companies use ISO based policies.
What they are suggesting is to do something like the Federally mandated Terrorism coverage. Every business insured in every insurer has a 1% premium on the total. The insurance company takes that and puts it aside into safe investments. Should another major terrorist attack happen and shuts down a sector of the economy, then those funds will be used support those affected.
If the fund is drained, then the Federal Government steps in to help. It's one of those things where insurance companies take the initial brunt, and hopefully the Federal Government doesn't have to step in. But should the money for terrorism dry up, then the Federal Government will get involved and the Insurance Company doesn't have worry about going belly up by burning through their surplus.
So what they are saying, something similar needs to happen for pandemics. And given how well the small business loan rescue package went, it will probably happen. I doubt it will be a 1% surcharge like terrorism, think it will be a bit more.