Property casualty insurers are facing unprecedented disruption, according to David A. Sampson, president and CEO of the American Property Casualty Insurance Association.
The association’s preliminary estimate is that business continuity losses just for small businesses with 100 or fewer employees could fall between $220 billion and $383 billion per month, he says.
Some property casualty insurers are voluntarily making temporary arrangements for certain services, Sampson says. These include:
• Flexible payment solutions for families, individuals, and businesses such as providing additional time to make payments.
• Suspending premium billing for small business insureds such as restaurants and bars for a specific number of days or billing cycles.
• Waiving insurance premium late fees for families, individuals, and businesses.
• Pausing cancellation of coverage for personal and commercial lines due to nonpayment and policy expiration, which includes personal auto, commercial auto, homeowners, business owners, renters, boat, motorcycle, condo, mobile home, personal umbrella and landlord policies.
• Wage replacement benefits for first responders and medical personnel who are quarantined.
• Suspending personal auto exclusions for restaurant employees who are transitioning to meal delivery services using their personal auto policy.
• Adding more online account and claims services for policyholders.
• Shifting more resources to anti-fraud and cyber security units, in recognition of the bad actors who will prey on victims during times of crisis.
• Suspending in-person loss control visits and inspections.
“Insurers are working with Congress and the Trump administration on a solution for managing pandemic risk to support an efficient and well-functioning economy,” Sampson says. “Many commercial insurance policies, including those that include business interruption coverage, do not include coverage for communicable diseases or viruses such as COVID-19. There are some who are calling for actions that would retroactively rewrite insurance policies to add new risks to the promises that were made to insurance customers. These types of proposals could have dramatic repercussions for families, individuals, motorists and businesses, potentially compromising the financial ability of insurers to meet their existing promises.”