For Consumers

Kreidler finds most business insurance policies in state exclude pandemic, virus coverage

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April 17, 2020

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler polled Washington state insurers to get a thorough picture of business interruption insurance. He found that only two insurers offer coverage for a pandemic event through their base policy. An additional 15 offered limited coverage through endorsements to standard policies.

“There’s no doubt that our business owners and their employees are suffering during this pandemic,” Kreidler said. “I have heard from countless business owners asking if their policies cover economic loss due to the coronavirus pandemic and the state’s Stay Home, Stay Healthy order. Unfortunately, the answer I got from insurers in Washington state is that the vast majority specifically exclude coverage for economic loss due to a viral pandemic.”

Business interruption coverage is offered alongside a commercial property insurance policy. In order to trigger the coverage, most policies require the property to have incurred physical damage from a covered peril that necessitates the business to suspend operations. The vast majority of those policies specifically exclude a virus or pandemic as a covered peril.

Kreidler’s office reviewed 226 sample notices to policyholders from 84 individual insurance companies and insurance groups doing business in Washington. The insurers reported over 194,000 commercial policies had at least one type of business interruption or civil authority coverage in effect as of March 15, with an estimated premium totaling $437 million. 

The American Property Casualty Insurance Association estimates that closure losses just for businesses with 100 or fewer employees are running $255 billion to $431 billion a month. For small businesses, it estimates losses are approximately 43 to 72 times their monthly commercial property insurance premiums  

Two insurers from FM Global Insurance Group offer coverage for a pandemic event through their base policy, focused on large companies with complex supply chains. 

The companies that offer limited endorsements at an extra cost are:

  • AIG.
  • Brotherhood Mutual Insurance Co.
  • Chubb.
  • Church Mutual Insurance Co.
  • EMC Insurance. 
  • Great American Insurance Group.
  • Hartford Fire & Casualty Group.
  • Liberty Mutual Insurance Group.
  • MS & AD Ins Group.
  • Mutual of Enumclaw.
  • Nationwide.
  • The North River Insurance Co.
  • Philadelphia Indemnity.
  • Travelers.
  • Zurich Insurance Group.

Kreidler has encouraged and ordered insurers to help businesses and employees in Washington state during the pandemic:

Learn about coronavirus and insurance.
See Washington state's coronavirus resources.