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Anonymous asked in Business & FinanceInsurance · 2 months ago

How much more would business insurance have been if it covered pandemics?

5 Answers

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  • fcas80
    Lv 7
    2 months ago
    Favorite Answer

    I think a lot more expensive.  It is rare, but when it occurs then it affects everyone.

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  • 2 months ago

    A situation like this is essentially uninsurable.  Please allow me to explain.  

    Insurance operates due to the law of large numbers, you insure a bunch of houses for a fraction of the rebuilding cost and when one burns, there is a pool of money from all of the other people to rebuild the house.  Lets say premiums are $1,000 and there are 1,000 policy holders; that means the most the company could pay out in claims would be $1,000,000.  In reality, that number would be lower since they also have overhead (staff, buildings, etc).  

    In this situation, its basically the equivalent of everyone's house burning at the same time.  Translate this to a business policy and use the same numbers, meaning 1,000 customers each paying $1,000.  So, you have a pool of $1,000,000.  However, if ALL (or the vast majority) of those customers all have a claim at the same time...there isnt enough money to go around.  

    The federal government, at least in the USA, steps in to assist (financially) when there are Terrorism claims.  However, this was only established following 9/11.  So, in response to this situation, insurance companies will probably turn to the feds to setup a backstop for Pandemic coverage going forward as they'll all need to offer something similar moving forward.  

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  • car253
    Lv 7
    2 months ago

    Probly a lot more.   There are different flu viruses every year. 

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  • 2 months ago

    Probably not a whole lot more as this virtually never happens

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  • 2 months ago

    probably a lot more

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