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Pandemic Business Interruption Insurance

Pandemic Business Interruption Insurance

Seaman’s Insurance Group Florida’s Premier Boutique Independent Insurance Agency has access to Pandemic business interruption insurance policies that will respond to future outbreaks such as Ebola and Covid-19.  The coverage may be indemnity based as well as parametric (we’ll get into the difference a little later). Traditional Insurance such as Business Owners Policies (BOPs) etc normally exclude this type of event leaving businesses in peril. They either require physical damage or they outright exclude communicable diseases.  While in some cases it may be an option to add an endorsement to cover communicable diseases, that coverage is normally very limited if it is even offered.

Why does a business need epidemic business interruption coverage?

The question: Why does a business need epidemic business interruption coverage? The answer to this question is now a little more obvious to businesses than it was in the past with the recent COVID outbreak that has crippled businesses and economies around the world. 

Endemic Business Interruption Insurance sorry we are closed sign in shop window

Endemic Business Interruption Insurance

After doing research and reading interviews with insurance leaders across the country, this coverage when proposed was rarely if ever purchased.  The reason, well, it is more than likely that throughout history, we rarely if ever have seen an outbreak like the Corona Virus and this insurance is not inexpensive.  If we look back in history we see the Spanish Flu caused a lot of disruption that caused the closings of businesses that brought people together. The same thought process we see with people that live in 100 year or 1000 year flood plains… people think they will never use it or need it. If we look back in just recent history we will find where communities in low risk flood zones have been devastated.  This coverage is a bit more expensive than buying a flood policy in a low risk flood zone causing business leaders and risk managers to rarely think twice about this type exposure coverage.

What does Epidemic Risk Insurance Cover?

The fact that barely anyone knew that this coverage was even available has many asking, What does Epidemic Risk Insurance Cover? The policy we have access to is designed to cover epidemic outbreaks of known disease types such as Ebola and coronaviruses and other viral outbreaks that are otherwise excluded from most if not all other business policies.  The Epidemic Risk policy also covers unknown, newly emerging viral diseases. Unfortunately it will not cover current and active outbreaks such as Covid-19. There is an option to potentially add-on coverage for variants of influenza (like Swine Flu or Avian Flu).  The policy does exclude certain diseases like HIV, bacterial infections (TB and Meningitis) as well as endemic diseases with in a population, Malaria in Africa for example.

Why has no one known that this coverage exists and is available?

 The question is a good one.  Why has no one known that this coverage exists and is available? The fact is, very few insurance professionals knew business interruption coverage existed for pandemic and endemic outbreaks.  The reason for this may be due to the lack of interest in the product. Between the cost and the lack of risk managers forethought that the expense may one day pay off seems to have reduced the marketing efforts of the companies that offer the coverage.  It seems that the carriers only partnered with huge brokerages and those brokerages had so little success in selling the policy that they seemingly did not reach out to their independent agency partners asking that they send opportunities their way. After this global COVID-19 outbreak and devastating disruption to the local and global economies this will surely change and Seaman’s Insurance Group, Florida’s Premier Boutique Independent Insurance Agency is here to help you!


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