Coronavirus or COVID-19 is disrupting businesses in both the public as well as private sectors as well as consumer behavior to create a massive dent in the economy at a global level. In a recent development, the leaders of G-7 came together and decided to do ‘whatever it takes’ to safeguard the economy amid the COVID-19 threat.
Among other industries, the insurance industry has taken a major hit when it comes to dealing with the outbreak. Insurers across the world have taken a series of drastic measures to sustain themselves. Let’s have a look at how the industry is dealing with the outbreak:
Governments all across the world have advised against ‘all but essential travel’ and looking at the number of flights that have been cancelled worldwide and the global pandemic has caused a major outcry in many areas. As more cases of coronavirus arise in various parts of the world, anyone with international travel plans is likely to have concerns about their safety and well-being.
Every travel insurance policy has its own terms and conditions. Insurers across the world have restricted coverages for claims relating to coronavirus. What seems to be a general trend, new policies will not cover trip cancellation or disruption relating to the virus.
The U.S health care system is a profit-driven industry, as is known by all individuals in the country. However, in light of recent events and keeping the coronavirus pandemic in mind, major private insurance companies in the country have come together in a bid to provide some respite to policyholders. A large number of insurers have come forward with an agreement to waive off any charge for a coronavirus test. However, this is limited to testing and does not cover the cost of care for those affected by the virus.
While there is no specific treatment available for the rapidly spreading disease, insurers have not expanded coverage for policyholders and there is ambiguity when it comes to expenses. Insurers have not agreed to waive out-of-pocket costs for treatment.
Financially, COVID-19 presents a situation that has not had a parallel since the 2008 financial crisis when the credit markets seized up and governments had to bail out banks and other institutions. If coronavirus continues to spread, it could cut the year’s global growth by half.
Many businesses have insurance policies that are meant to withstand whenever disasters strike. However, these policies do not include such massive outbreaks as coronavirus. With the extent of damage that coronavirus has caused to businesses across industries, regular business interruption insurance policies will do no good since the virus doesn’t affect businesses physically as a traditional fire or flooding incident would do, which is a requirement for business insurance to kick in.
Due to the availability of working remotely, most companies and businesses will have to resort to such alternatives and absorb much of the losses themselves.
These are some of the ways coronavirus is impacting the insurance industry and its various sectors. It is best advised that one should contact their insurance carriers and carefully go through existing policies to determine the extent and scope of one’s coverage and if there is a need to buy additional coverage to tackle the epidemic.