U.S. Lawmakers are Pressuring Insurers to Cover COVID-19 Business Losses

COVID-19 has spread throughout the world, affecting individuals, families, and the economy. As congress and state legislators scramble to put together a financial relief package for businesses, the pressure is mounting on private and commercial insurers to do more. 

The Request

Eighteen members of Congress have asked the property and casualty insurance companies to pay for any business interruption claims, even if their policies exclude said coverage. This bipartisan group of U.S. House members made their case in a March 18 letter.  

Members who signed this include the House Democrats: Andy Kim, NJ; Nydia Velazquez, NY; Kathleen Rice, NY; Max Rose, NY; Grace Napolitano, CA; Gilbert Cisneros, CA; Scott Peters, CA; Joe Cunningham, SC; Andy Levin, MI; Rashida Talib, MI; Alcee Hastings, FL; and Mark Veasy TX. 

Signing Republican House members include; Brian Fitzpatrick, PA; Jim Hagehord, MN; French Hill, AR; Rick Crawford, AR; Bruce Westerman, AR; and Steve Womak, AR.

The request was sent to the leaders of the American Property Casualty Insurance Association, The National Association of Mutual Insurance Companies, The Independent Insurance Agents & Brokers of America, and the Council of Insurance Agents and Brokers.


Insurers have rejected this request, arguing that business interruptions were not designed to provide financial compensation for the impacts of communicable diseases like COVID-19. 

However, some insurers have offered to work with Congress on “solutions that provide the necessary relief as soon as possible.” They have yet to disclose any details on what actions they have in mind. 

The trade group leaders also noted that member insurers have been active in charitable efforts and are working to offer flexibility on premium payments for customers. 

What Could Happen

According to Meyer Shields, an insurance analyst from KBW, the reaction of the property and casualty insurance industry is too optimistic. Shields added that the extent to which the industry ends up paying for business losses due to coronavirus are likely to be paid by specialty insurance carriers, rather than the standard. 

Since there’s an absence of language that explicitly covers communicable disease claims or exclusion clauses will mean that more carriers will be on the hook to cover this sort of application. 

COVID-19 Relief Package Updates

On Wednesday, March 25, the White House and the Senate reached a $2 trillion deal aimed at stimulating the economy. The bipartisan relief package is the biggest in history and will deliver critical support to businesses that have been forced to shut their doors, hospitals, and American Families. 

The legislation is expected to be enacted within days. The deal was reached at midnight, and lawmakers and their aides were still working on drafting it’s content early on Wednesday morning. 

Speaker Nancy Pelosi has endorsed the deal and is now deciding on how best to pass it through, considering House members are scattered across the country in quarantine. The final vote is expected on March 26. 

The Verdict

Across party lines, lawmakers are coming together to sustain workers and businesses from all areas of the American economy. The relief bill targets support for companies large and small- from American Airlines to small law firms like RDK Legal. That said, as Senator Chuck Schumer said, “like all compromises, this bill is far from perfect.”