Business Interruption Insurance Solutions Amidst The Covid 19 Pandemic

Business interruption insurance serves to replace income lost in the event of damage to property. The obligation of insurance companies to pay for losses due to the COVID-19 pandemic -- an event that did not physically damage property, but still halted business -- sparked much debate. This paper reserves this dispute for the courts; instead, it aims to look forward and explore options for insuring pandemic risk. Due to the daunting severity and scope, a partnership between private insurers and the government to manage the risk is likely, with the Pandemic Risk Insurance Act (PRIA) based on the Terrorism Risk Insurance Act and the Business Continuity Protection Program (BCPP) based on the National Flood Insurance Program as major proposals. This paper explores the two programs in the following: their history and justification for proposition, the partnerships that served as their blueprint, and their benefits and drawbacks. Results indicate that the BCPP offers a more favorable solution from both financial and administrative lenses.