Policies for a pandemic should begin with a review of existing policies for small businesses. To ensure COVID-19 does not further weaken the economy, insurers should work to increase the flow of goods and services; to infuse businesses with the lifeblood necessary to recover from a plague; and to remove the pox on houses of civic trust and commercial value.
Insurers have a monetary reason to do these things, which is also moral and just, because insurers cannot write new policies or revise current policies if most policyholders go bankrupt. Who, after all, will buy something with nothing? What business will pay premiums when it cannot meet payroll? How will insurers sell policies to business owners if no one stays in business?
According to Sean Andrade of Andrade Gonzalez LLP:
“Insurers should help to keep businesses open, the country employed and goods and services flowing by honoring their policy obligations. If necessary, the federal government should backstop insurers with guarantees of bailouts for coverage of COVID-19-related losses.”
This suggestion is straightforward — and right — because it speaks to the urgency of the present danger. And, yes, if the federal government must intervene, let it do so for the health of the economy.
“Even with communicable disease exclusions in policies, this should not be the end of the road for businesses that have faced direct losses as a result of the COVID-19 pandemic and the resultant state, county and local health and safety orders,” Andrade says.
If advocacy of this sort advances a cause of national importance, if the cause is not only important but also indispensable to finding a cure, if the cure for small businesses is economic relief, then the actions of insurers and the government must be fast and certain.
This plan will save small businesses, yes, but it will rescue insurers, too. It will spare insurers from losses too large to endure and too impossible to ignore. It will make insurers beneficiaries in their own right, while delivering benefits to the industrious among a multitude of industries.
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By these standards alone, insurers have a plan worthy of adoption. Whether alone or with help from the government, insurers have a plan to weather this pandemic.
Without these standards, insurers face hard times while businesses face the worst hard time: a time of foreclosure by banks or forced closure by cities and towns; a time of despair among workers and depression among citizens without work; a time of fear and a fight for survival throughout the land.
Now is the time to prevent this economic end time, to change time by avoiding it altogether.
Now is the time for insurers to change their policies — to update their policies — to guarantee the time does not come when there will be no time for rescue or recovery.
Now is the time for insurers to do what is necessary, intelligent and wise. Time will neither slow nor stop for insurers to delay a change in policy, but time will record — and history will note — that insurers did what was right.
