Why Many Businesses Will Be on the Hook for Coronavirus Losses Talks about how insurance companies will now exclude epidemics in standard business interruption policies

The coronavirus is proving costly for global business—and insurance won’t be much help.
With large parts of China in lockdown and other Asian countries on high alert, the virus, which causes an acute respiratory disease called Covid-19, has disrupted shops, hotels, airlines, factories and much else. Multinationals including Apple and Starbucks have closed many outlets in mainland China.
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It has some companies poring over insurance policies in hopes of filing a claim for losses from business interruptions. “We are getting lots of questions about it,” said Gisele Norris, a strategic account manager at insurance broker and consultant Aon PLC, and co-leader of its global infectious disease task force.

The odds aren’t great. Insurers and reinsurers learned a costly lesson from severe acute respiratory syndrome in 2002-03. In Hong Kong, HK$325 million ($41.8 million) was claimed for business interruptions from SARS; hotel chain Mandarin Oriental International Ltd. alone recouped US$16 million from its insurers, led by American International GroupInc.

Now insurers across the board exclude epidemics in standard business-interruption policies, which mainly cover property damage from events such as fire, terrorism and natural catastrophes.

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