American Property Casualty Insurance Association
  • Staff Contact: Eileen Gilligan     
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  • FOR RELEASE ON RECEIPT
  • April 28, 2020
  • APCIA Releases Update to Business Interruption Analysis
  • WASHINGTON, D.C. — David A. Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), released the following statement along with new industry data today:

    “Insurers understand the urgency of helping businesses and individuals recover from this unprecedented crisis and preventing a larger shut down of the economy. Insurers are voluntarily implementing more than $8 billion in new discounts and refunds for policyholders; expanding flexible payment solutions for families, individuals, and businesses; suspending premium billing for small businesses such as restaurants and bars; and pausing cancellation of coverage for motorists due to non-payment and policy expiration.

    “Business interruption insurance policies do not typically cover losses related to viruses. Only the federal government can be the bridge for a crisis of this proportion. The property casualty industry supports federal assistance programs that are delivering aid directly to vulnerable business communities, particularly affected small businesses.

    “Insurers joined a broad business trade coalition calling for the COVID-19 Business and Employee Continuity and Recovery Fund, which would provide immediate financial assistance to impaired businesses to help them survive, reopen, and retain and rehire employees. Insurers are working with the business community for enactment of the Recovery Fund in the next federal COVID-19 relief package.

    “Insurers are also encouraging policymakers to develop COVID-19 safety and liability protection standards that will help business owners manage the uncertainty of when and how to re-open. Threats of lawsuit abuse exploiting this crisis with litigation profiteering will stop America’s recovery before it even starts. Liability protections are especially important for the business leaders who have made heroic efforts to adjust operations to help our country combat the virus, including: manufacturers changing plants and capacity to make supplies such as sanitizers, face masks, face shields, and medical clothing; hotels pivoting to house medical workers, patients, and the homeless; and convention centers and other mobile sites becoming medical facilities.”

    APCIA continues to analyze the latest available information to estimate the potential business community and insurance industry impact of COVID-19.

    Small Businesses(fewer than 100 employees):

    • APCIA estimates that closure losses for small businesses with fewer than 100 employees are between $255 billion to $431 billion per month. *
    • These numbers dwarf the premiums for all relevant commercial property risks in the key insurance lines, which is estimated at $4.5 billion a month. **
    • That means continuity losses for small businesses with fewer than 100 employees are in the general range of 50 to 100 times the monthly relevant commercial property insurance premiums, which includes coverage for losses as a result of such perils as fire, wind, hail, and water leaks.

    Small Businesses(fewer than 500 employees):

    • APCIA estimates that closure losses for small businesses with fewer than 500 employees are estimated to reach between $393 billion to $668 billion per month. *
    • These numbers dwarf the premiums for all relevant commercial property risks in the key insurance lines, which is estimated at $4.5 billion a month. **
    • That means continuity losses for small businesses with fewer than 500 employees are in the general range 85 to 150 times the monthly relevant commercial property insurance premiums, which includes coverage for losses as a result of perils as fire, wind, hail, and water leaks.

    Surplus for all of the U.S. home, auto, and business insurers combined to pay all future losses is roughly $800 billion, with the combined capital of the top business insurance underwriters representing only a fraction of that amount. Surplus represents dollars held by companies, required by law, to pay future losses for existing contracts.


    Sources: APCIA using publicly available data sources including Bureau of Labor Statistics, Insurance Services (Verisk Analytics, Inc.), Houston Chronicle, S&P Global Market Intelligence, and other published reports.

    ** Source: APCIA’s calculation based on S&P Global Market Intelligence.


  • The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions—protecting families, communities, and businesses in the U.S. and across the globe.
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