The COVID-19 pandemic has been a wake-up call for the insurance industry in how it approaches cover for non-damage business interruption (NDBI). This is according to Lloyd’s Chief Executive John Neal, who said (in a virtual discussion hosted by The ReInsurer), that the pandemic had highlighted businesses’ need for NDBI cover and that both Lloyd’s and the wider industry would need to work with governments to meet this need.
Executive SummaryMost astute industry observers were already alive to the growing need for solutions catering to non-damage business interruption well before the COVID-crisis struck, explains Alastair Speare-Cole.
But did it really take the COVID-crisis to reveal the true extent of NDBI underinsurance?
For many years now, the risk landscape has been shifting from tangible risks and exposures to intangible sources of disruption. When traditional business interruption (BI) insurance was first devised in the 19th century, it grew out of the property sector and was a consequential loss policy that was triggered by physical perils, such as fire and flood.