Coronavirus News

Denied Business Interruption Claims Could Spur Boom in Captive Insurance

Christopher Hanewald, member of the Firm’s Corporate & Securities Team authored the following article for Bloomberg Tax

The insurance industry is built on a foundation of actuarial certainty. Individuals and businesses pay significant premiums—$1.22 trillion in 2018—to have something they hope they never will need. The Covid-19 pandemic has put that certainty in jeopardy. As government mandated lockdowns began to wreak havoc on revenues in early March, business owners scrambled to review property and casualty policies for what they thought might be their saving grace— business interruption policies believed to be the buffer that would insulate businesses from the pandemicinduced trauma. As many articles have discussed; however, their hopes were short lived. Insurance underwriters had learned from past experience and added exclusions to limit or exclude coverage for unpredictable events, such as pandemics following the SARs outbreak in the early 2000s. Click here to read more.