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President Trump took aim at insurance companies on Friday, many of which are refusing to cover businesses that have been forced to shut down under measures aimed at preventing the spread of coronavirus.
Trump noted many companies have business interruption insurance – but are still unable to get payouts from insurance companies.
“You have people that have never asked for business interruption insurance, and they’ve been paying a lot of money for a lot of years for the privilege of having it, and then when they finally need it the insurance company says ‘we’re not going to give it,’” Trump said during a press conference at the White House. “We can’t let that happen.”
Business interruption insurance often doesn’t specifically cover communicable diseases. Trump noted that oftentimes these policies don’t mention pandemics, though sometimes they include it as an exclusion.
“I would like to see the insurance companies pay what they need to pay, if it’s fair,” Trump added.
As previously reported by FOX Business, there are options for coverage – including something known as epidemic insurance – but it is not a very common product.
Many companies take out cancellation insurance for an event or have business interruption insurance. Even individuals hosting large weddings may opt to take out cancelation insurance, which would typically cover something like a weather event.
However, after the SARS and MERS outbreaks earlier this century, InsuranceQuotes analyst Erik Josowitz told FOX Business a lot of companies revamped their cancelation policies to exclude communicable diseases. That means companies are not covered unless they purchased a specific policy.
Famous chef Wolfgang Puck echoed Trump’s comments in an interview with FOX Business earlier this month, saying that insurers were refusing to cover restauranteurs who have been paying for business interruption insurance.
“All the smaller retailers, like 30 million people, paid the insurance over so many years and [insurers] now refuse to pay business interruption,” Puck said. “And for us, that's really an important part … if they would pay up and own up to their commitment.”
Traditionally, epidemic insurance policies have been rare – and therefore more expensive, which is why companies don’t typically purchase them.
But if they become more common – and as these communicable disease events increase in frequency – price points may become more accessible.