Many healthcare facilities addressing the COVID-19 pandemic are suffering significant daily loss of revenue. Their property insurance policies frequently contain limitations on business interruption coverage. Property policies written for healthcare institutions frequently contain broad limitations on business interruption coverage caused by the cascading effect of dealing with the coronavirus.
Many businesses have been ordered shut to try to contain the outbreak, while shelter-in-place orders and social distancing are dramatically reducing business for those that are open. Coverage issues around business interruption losses related to COVID-19 have prompted discussions of creating a federal pandemic backstop.
Fitch Ratings has revised its outlook for the underlying fundamentals of the global reinsurance sector to negative from stable due to increased concerns over COVID-19 and its related impacts on reinsurers' credit quality. Fitch's outlook for the ratings levels in the reinsurance sector remains stable, the rating agency said.
Don't miss the April issue of "Captive Insurance Company Reports" ("CICR"), in which John Thomson, editor, expresses his concerns and comments on COVID-19 and the risk management implications, including a role for captives.
The fallout from the COVID-19 pandemic highlights the role of captive insurance companies as a risk mitigation tool.