NEW YORK (Reuters) – U.S. property and casualty insurers have cast the coronavirus pandemic as an unprecedented event whose massive cost to small businesses they are neither able nor required to cover.
FILE PHOTO: Emergency medical technicians (EMTs) unload a patient into an ambulance outside of the Hammonton Center for Rehabilitation and Healthcare one of numerous nursing homes to have staffing shortages during the national outbreak of the coronavirus disease (COVID-19) in Hammonton, New Jersey, U.S., May 19, 2020. REUTERS/Lucas Jackson
The industry has warned it could cost them $255 billion to $431 billion a month if they are required, as some states are proposing, to compensate firms for income lost and expenses owed due to virus-led shutdowns, an amount it says would make insurers insolvent.
The estimate, made by the American Property Casualty Insurance Association (APCIA), a trade group, was recently used by the industry to successfully lobby against state and city lawmakers’ efforts to legislate to make the sector pay.
Insurers say business interruption policies only apply when actual physical property damage prevents a business from operating and any attempt to apply cover beyond that, for a pandemic, are unconstitutional.
The stance has discouraged some policyholders from filing claims and prompted others to take legal action.
A Reuters examination of APCIA’s estimate, however, suggests the possible bill may not be so onerous.
The APCIA estimate is an industry worst-case scenari