While it should have been obvious to all as a result of events such as London’s Borough Market attack, the insurance industry has been slow to acknowledge that gaps still exist with non-damage business interruption exposure. Business Interruption payouts are often dependent on physical damage occurring, but loss can occur even without physical damage, leaving businessowners unprotected. It was just recently, in the wake of Covid-19, that the industry has started to take a deeper look at the issue and bring new solutions to market.
Alastair Speare-Cole, President and General Manager of Insurance at QOMPLX, explores the need for change in the way insurers and brokers think about business interruption in the article ‘Was COVID-19 Really a Business Interruption Wake-Up Call?’ for Carrier Management.
“Some specialist NDBI covers exist in the industry, such as network interruption for cyber exposures and denial of access as part of the suite of political violence covers offered by Lloyd’s and others. But for SME customers in particular, the trigger for business interruption payouts continues to hinge on actual physical damage. And in the current climate, as insurers double down on excluding any vestiges of the prior soft insurance market, wordings that may have included elements of NDBI cover have all but disappeared,” writes Speare-Cole.
There are solutions. As Speare-Cole writes, “Some MGAs, including QOMPLX, have been keen to promote a different approach to supplementing traditional business interruption with parametric cover. Parametric covers deliver a payout to insureds based on objective triggers, thus avoiding the complicated—and often drawn-out—loss of profits adjustment process.”
Read the full article at carriermanagement.com