Insurance companies exclude pandemics, and here is why…

Evil insurance companies

Insurance companies get a terrible reputation for denying claims, and for a good reason.  Not everything can be covered, and when an insured receives a denial letter, is it likely for an expense that could have a significant impact on the livelihood.


Back in 2002-2003, the SAR’s outbreak infected roughly 8,000 people, and it leads to millions of dollars in business interruption costs, including a 16 million dollar settlement to Mandarin Oriental International.

Since then, many policies specifically exclude viral pandemics as part of the policy.

Everything can not be covered

Insurance companies have to justify their rates with their Department of Insurance.  They open their books and expose their expenses and projections for the future.  If you look at the significant impact COVID has had already had, you can understand how a loss of use limit of $50,000 for a $500/year premium can be an impossible expense to cover when you multiply these claims 100 times.

The US government

The US government has recently dedicated over 2 trillion dollars to help stabilize the economy.  Insurance companies in total have less than 1 trillion according to (

That means if you liquidated every insurer, you could pay for half of the stimulus bill.

Want a policy that covered Pandemics?

Pandemic business insurance exists, and it is offered by a broker, “Marsh.”   While many companies are looking into quotes, according to,- Not a single policy was sold.


Imagine a policy so expensive that even during a current pandemic, massive companies are not also considering.

Some risks are just too risky to insure.  I highly recommend going over your current insurance policy to understand the policy language.  The responsibility to manage your risk falls upon the business’s leadership, as you can not rely on an insurance policy to cover every issue that may arise out of a loss.


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