As the country watched COVID-19 travel from China throughout Europe and to the United States, it was obviously going to become an enormous issue. In order to contain the spread of the virus, governors started closing down schools and nonessential businesses in order to keep the hospitals from being overwhelmed. Once businesses closed and realized that they were losing income, they looked to their insurance policies for coverage for those losses.

Business interruption coverage, common to many commercial property policies, provides coverage when a covered peril causes the suspension of business operations or neighboring operations which causes civil authorities to shut down the insured's business. The problem is that a virus does not cause physical damage. Carriers immediately started explaining this to insureds as they tried to file claims. Some insurance departments issued bulletins to carriers requiring them to send notices to insureds explaining coverage, while other departments issued consumer bulletins explaining coverage and that interruption losses were likely not covered.

Like flood, earthquakes, and other catastrophic losses, pandemics are something that is virtually impossible to predict and rate for. Even if rates could be developed, like flood coverage, premiums would be so high as to be unaffordable for most insureds.