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Addressing the challenges of COVID-19: From underwriting to claims

The COVID-19 pandemic is creating new challenges for property/casualty insurers and policyholders across both personal and commercial lines. We have seen executive orders issued whereby many retail and service businesses have effectively been ordered to close, while some others, like restaurants, have been restricted to offering take-out and delivery. Scores of individuals are working remotely or have lost their jobs.

And millions of people are staying home as they try to educate their children, order food and supplies online, and keep their families safe from the disease.

Throughout these challenges, some personal and commercial lines policyholders are looking to their insurers for help, and some regulators are taking steps to give specific guidance.

Premium changes and billing: Some states are requesting insurers not to increase premiums and to provide additional time for policyholders to pay their bills.1 At least one state is recommending insurers consider reducing certain premiums during the pandemic, as businesses close or reduce their hours, people practice social distancing, and cars stay off the road.2

Policy cancellations: Regulators in some states are expecting some insurers to hold off on canceling policies for a number of reasons, including expired driver’s licenses.3

Additional coverage: Some states are requiring insurers to offer or provide coverage for employees of certain businesses, such as restaurants, who use their own cars to deliver food and other products to customers. In one state, such coverage must generally be made available to restaurant businesses as part of their general liability policies, or coverage must be provided to individuals as part of their personal auto policies for any covered personal autos they use to provide such delivery service.4

Business interruption: Claims and litigation

For several years, standard business interruption policies have contained exclusions for losses caused by bacteria and virus. And while some members of Congress have looked toward insurers to help cover these losses, several groups, including the National Association of Insurance Commissioners, have strongly opposed any attempts to retroactively require insurers to cover losses for risks they hadn’t underwritten.5

The NAIC said in a statement: “While the U.S. insurance sector remains strong, if insurance companies are required to cover such claims, such an action would create substantial solvency risks for the sector, significantly undermine the ability of insurers to pay other types of claims, and potentially exacerbate the negative financial and economic impacts the country is currently experiencing.”6

But that doesn’t mean businesses aren’t going to file claims or sue insurers in the coming months. In Oklahoma, two Native American tribes that closed their casinos due to COVID-19 have reportedly sued insurers, saying their losses should be covered under their business interruption coverage, according to an article in The Oklahoman.7 The lawsuit follows another reported suit in Louisiana, where a New Orleans restaurant apparently sued its insurer for business interruption losses resulting from COVID-19.8

Addressing the needs of insurers

To help address the needs of insurers during this challenging time, Verisk has developed a wide range of resources, including:

Insurance Resources

  • Advisory policyholder notices: We’ve introduced advisory notices that insurers can use to inform policyholders about coverage provisions concerning business interruption coverage and COVID-19. Some states are requiring insurers to provide these notices. 
  • Optional endorsements: We’ve made available an advisory, optional, not-filed endorsement related to coverage for food delivery designed for use with ISO’s Personal Auto Policy. We’ve also made available two advisory, optional, not-filed endorsements designed for use with ISO's Commercial Property Business Interruption policies that address the possibility of mandated closures of policyholders' businesses by a civil authority due to the presence or suspected presence of the coronavirus.
  • Exploring potential rating implications: We’re currently monitoring the ongoing global pandemic and its potential impacts on the U.S. property/casualty insurance market and the greater U.S. and world economies. Among the questions we’ll be watching are whether the closing of many businesses will result in fewer commercial property claims, and whether more people working at home will lead to an increase in cyber and other related claims. We’ll also be looking at how decreases in traffic may affect auto losses and whether people staying at home will reduce the number of home thefts. 
  • Gathering feedback from insurers: We’ve held two calls with ISO customers recently, presenting some of the COVID-19 tools we’ve developed and listening to what’s on their minds. We’ll be scheduling more of these in the coming months.

Insights and Thought Leadership

  • Online resource pages: We’ve developed COVID-19 resource pages that provide thought leadership from across Verisk on the pandemic, along with updated information for insurers on new regulatory actions and ISO tools.
  • The latest research: Our ISO Emerging Issues team has been providing daily updates on the ways COVID-19 is affecting the world and the risks that carriers insure.
  • Informational bulletins: PCS has been issuing informational bulletins several times weekly on insurance related to COVID-19, including business interruption, cyber risk, and alternative risk transfer.

Claims Resources

  • Access to remote inspection tools -  To help eliminate or reduce on-site inspections for property underwriting and claims, we’re currently offering insurers access to our OneXperience (for personal and commercial Lines) and ClaimXperience solutions at no charge. These solutions allow professionals to collaborate remotely with policyholders using a range of tools, including video.
  • Prior-loss photos and image forensics for claims: To assist in detecting potential fraud, ISO ClaimSearch contributors can currently access prior-loss photos and image forensics at no charge. The photos and analytics are being made available to those who contribute to the database and can help insurers evaluate the authenticity of customer-submitted and third-party loss photos.

Risk Modeling Resources

  • Updated loss estimates – To keep insurers informed on the latest COVID-19 information and loss estimates, during the height of the crisis, we are providing access to selected ALERT™ services (AIR Loss Estimates in Real Time).
  • Catastrophe modeling: The team at AIR is modeling the possible spread and severity of the COVID-19 pandemic, helping (re)insurers understand morbidity and mortality, worker’s comp and supply chain, and liability impacts. Learn more on their resource page.

  1. Ricardo Lara, “60-Day Grace Period for Insurance Premium Payments Due to the Disruption Caused by the Novel Coronavirus (COVID-19) Outbreak”, March 18, 2020, California Department of Insurance, < BillingGracePeriodNotice03182020.pdf>, accessed on March 31, 2020.
  2. Alfred W. Redmer, Jr., “Property & Casualty Temporary Rate Relief Filings”, March 23, 2020, Maryland Insurance Administration, <>, accessed on March 31, 2020.
  3. Brian Fordham, “DMV bulletin and insurance industry guidance regarding expired driver licenses, vehicle registrations”, Oregon Department of Consumer and Business Services/Division of Financial Regulation,<
    >, accessed on March 31, 2020.
  4. Mark V. Afable, “Coverage for Delivery Drivers for Restaurants during the COVID-19 Public Health Emergency”, March 23, 2020, Wisconsin Office of the Commissioner of Insurance, < CoverageforDeliveryDriversforRestaurants.pdf>, accessed on March 31, 2020.
  5. NAIC, “NAIC Statement on Congressional Action Relating to COVID-19”, March 25, 2020, <>, accessed on March 31, 2020.
  6. Ibid.
  7. Randy Ellis, “Coronavirus in Oklahoma: Tribes sue insurance companies over business interruption coverage”, The Oklahoman, March 25, 2020, <>, accessed on March 31, 2020.
  8. Jim Sams, “Restaurant Suit Tests Business Interruption Insurance for Coronavirus Shutdowns”, Insurance Journal, March 19, 2020, <>, accessed on March 31, 2020.

Sandee Perfetto

Sandee Perfetto is senior director, personal lines coverage products at Verisk. Sandee can be reached at

William P. Mauro

William P. Mauro is vice president and head of coverage for commercial lines at Verisk. He can be reached at

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