ArturHiaeve
Artur Hiaeve

Artur Hiaeve Talks About the Insurance Industry’s Response to the Covid-19 Crisis

Artur Hiaeve Talks About the Insurance Industry’s Response to the Covid-19 Crisis

Following several months of coronavirus induced lockdowns, many companies turned to insurance companies for financial compensation due to disruptions. Artur Hiaeve, an insurance consultant, predicts a steady increase in the number of business interruption lawsuits. His statement comes at a time when many companies are still assessing the impact of the health crisis on their finances and day-to-day operations.

In addition, Hiaeve says the insurance industry faces significant reputational risks. He emphasized the need to restore customer confidence and loyalty following the challenges triggered by the Covid-19 pandemic. According to Bloomberg’s report, the insurance industry faced thousands of business lawsuits after insurers declined to pay claims.

Hospitality, retail, and tourism sectors initiated the bulk of lawsuits against insurers. Artur Hiaeve highlighted cases involving two Las Vegas casino resorts taking AIG to court over declined claims. Similarly, leading fashion brand Ralph Lauren took legal action against FM Global for refusing to pay Covid-19 business interruption claims. The retailer is suing the insurer for $700 million.

Artur Hiaeve Explains Pandemic Coverage Issues

Artur Hiaeve states that disagreements between insurers and companies were inevitable. Losses triggered by a global pandemic are not insurable due to the scope of the crisis. For instance, analysts estimate losses linked to Covid-19 business interruption in the United States alone can reach up to $400 billion monthly. Understandably, insurers lack the capacity and willingness to cover this amount.

Federal authorities can handle the sheer scope of the problem through relief funding. It is no surprise that most Americans believe that the government should provide the funding to alleviate financial difficulties associated with the pandemic. By bearing financial responsibility, federal authorities can assist businesses of varying sizes to stay afloat.

Fewer people who participated in surveys believe insurers should compensate businesses for Covid-19 interruption losses. In a poll conducted by CivicScience, only 16 percent of participants expressed this view. In addition, eight percent of the respondents supported lawsuits against insurance companies.

Business Interruption Contracts Limits

Artur Hiaeve argued that forcing insurers to cover claims linked to global pandemic risks is detrimental to all policyholders and the economy. He added that business interruption contracts have limitations when it comes to risks triggered by a worldwide pandemic. On the other hand, the government can initiate programs that provide immediate relief to distressed companies.

By providing relief, federal authorities enable insurers to maintain surpluses or reserves to cover policyholders for covered losses caused by hurricanes and wildfires.

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