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Insurance Coverage for COVID-19 Claims / By: Karis Kelly


Since the COVID-19 pandemic began in March 2020, it has impacted everyone from businesses to individuals. A study done by Wiss found that 81% of small businesses have financially suffered due to COVID-19 (Cision PRWeb, 2020). Businesses are currently asking for their commercial insurance carriers to cover revenue loss resulting from government shutdowns. Since January 30, 2020, over 10,000 complaints have been filed utilizing first and third-party insurance (Hunton Andrews Kurth, 2021). This poses a serious question, should insurance companies cover revenue loss from COVID?

It’s important to recognize the magnitude of financial loss that insurance carriers would have to cover. According to the American Property Casualty Insurance Association, it is estimated that small businesses alone are potentially losing $220-383 billion each month (APCIA). Chris Nadeau, a partner at Nicolaides Fink Thorpe Michaelides Sullivan LLP said, most companies are suing over revenue losses compared to COVID at the workplace. This poses a major problem for insurance companies. If carriers were to pay all of the claims for revenue loss, they would go bankrupt. Many insurance companies are refusing to pay for losses not just because of the costs, but also the companies’ coverage plans. Insurance policies are specific and include what is covered and what is excluded.

Since companies are not being covered for COVID-19 revenue losses, what’s next? In an interview with Jenna DiJohn, an associate at Nicolaides Fink Thorpe Michaelides Sullivan LLP, she said in the future insurance policies will include a standard for pandemic policies and have exclusions for virus coverage. These possible changes would help alleviate possible conflicts with insurers and businesses regarding pandemics/epidemics in the future. In addition, some believe that the government should pay for the revenue losses. The government shutdowns, especially for restaurants, have severely impacted business profits which leads people to believe that it should be the government’s responsibility to cover loss of revenue.

Overall, businesses have been at the mercy of the court systems for means to recoup financial losses due to COVID-19. This will most certainly lead to changes in insurance coverage in terms of virus protection for businesses.


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