Essay Sample. COVID-19's Impact on Business Insurance Coverages

The effects of coronavirus disease (COVID-19) have been visible in the last few months across the world. The business sector, including the insurance companies, have been immensely affected by the pandemic. This form of a global pandemic has not been experienced before; thus, its impacts on insurance coverage are unclear. However, insurers are negatively affected because they offer insurance claims to adverse contingencies such as death and health (Craig et al., 2020). The pandemic has caused a major economic disruption, and this has made it costly for insurance forms to provide claims (Craig et al., 2020). The pandemic has various impacts on different business insurance coverage.

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The Business Income Coverage, which specifically covers business interruptions, is affected due to the cessation of business operations. The companies are not likely to cover the losses incurred, and claims will not be granted due to current changes in the insurance policies. Generally, there is no business income policy in the US or the world that offers coverage or compensation for losses due to the cessation of business activities (Gunn-Mowery Team, 2020).

Pennsylvania State Department of Labor and Industry implemented a policy that employees who contract COVID-19 are entitled to the worker's compensation coverage. However, for them to be covered, they must prove that they got the virus from their places of work or while on duty (Gunn-Mowery Team, 2020). Furthermore, some states like Washington have agreed to provide Workers Compensation for essential service employees, such as medical workers (Gunn-Mowery Team, 2020). They agreed that they will pay for the medical expenses and wage-loss for any first responder health worker who is quarantined.

Moreover, many restrictions have been put up due to COVID-19, and they are being altered frequently. The changes may make it difficult for firms to meet the contractual requirements they had given their clients or employees. The pandemic may cause delays in meeting the contract requirements within the stipulated timeframe (Gunn-Mowery Team, 2020).

Conclusively, COVID-19 has affected the insurance sector, and the insurers are experiencing more negative impacts. The current disruption in the economy has made it expensive for insurance to meet the needs of their clients.

References

Craig, T., Serap O. G., Inna, R., and Tetsutaro, S. (March 29, 2020). COVID-19 Outbreak: Insurance Implications and Response1. The World Bank Group. http://pubdocs.worldbank.org/en/687971586471330943/COVID-19-Outbreak-Global-Policy-Actions-on-Insurance.pdf

Gunn-Mowery Team. (March 27, 2020). FAQ’s: COVID-19’s Impact on Business Insurance Coverages. https://www.gunnmowery.com/news/faqs-covid-19s-impact-on-business-insurance-coverages/