With US domestic issues dominating the news, the pandemic has taken a back seat in the news. Generally speaking, we are seeing positive signs from across the globe, with countries reopening and trade starting to reignite. Of course, there is still the fear of another wave as we move into the fall.
In meantime, the second and third impacts of the pandemic are starting to become more evident.
One story that is emerging, is business insurance. In short, the industry did not plan for this pandemic and wording in policies is ambiguous. In the UK, it is already being assessed and ultimately decided on by the courts.
Most business policies have business interruption insurance, but this generally covers property damage. Policy holders are hoping for that the wording in the policies (specifically notifiable diseases) will cover their loss of earnings in the pandemic. If this does go in favor of the policy holder, there is a good chance that it will result in a number of insurers going bankrupt. The FT reported that a poll of business leaders estimates the bill could be as high as $300bn. There is also the question about a second wave and another future pandemic.
Similar to many industries, the insurance business was not ready for this event. The outcome is uncertain, and it will take time to resolve.