The insurance industry will face extraordinary challenges dealing with COVID-19. Health insurers are already struggling with decisions that will affect their direct costs related to testing and providing treatment for the virus, and many potential indirect costs, such as the costs of delaying treatment of other health issues. Property insurers are carefully reviewing policy language to determine their liability for coverage in several areas. For one, they may be required to cover business income losses, which are normally limited to direct physical damage, as business argue that viral contamination constitutes a physical loss. Covered businesses may be found liable for not taking adequate prevention measures, or for discrimination in requiring workers to get tested for the virus. Amid all the uncertainty of the virus, it will be a while before we know the full impact on the industry.

Dr. Patricia Born, Payne H. and Charlotte Hodges Midyette Eminent Scholar in Risk Management & Insurance

Areas of expertise: Liability, insurance regulation, health insurance and catastrophe modeling