Concerns and Opportunities Related to Pandemic Coverage

Aug 3, 2021 / by Nicole Milos

While the U.S. economy slowly returns to normal following the COVID-19 pandemic, the insurance industry continues to grapple with business interruption claims, court battles and the future of pandemic-related insurance. In Part II of our two-part Advisory Report, Nicole Milos, Assistant Counsel at AAIS, explains the systemic risk global pandemics pose to the insurance industry and how we’re leveraging data gathered during the pandemic to meet customer demand for future pandemic-type coverage.


The biggest issue for carriers with pandemic-related insurance is that insurance was not intended to cover systemic risks. Ms. Milos explains there are three major issues:

  1. Widespread losses
  2. Solvency issues
  3. Unknown risk

Litigation on pandemic coverage – specifically business interruption – has since escalated. In addition, many departments of insurance placed a hold or denied court filings during the pandemic and many of those holds have since been released.

“We can expect that the industry will look to legislation and courts to determine where potential challenges and ambiguities exist in order to protect against the risk in the future,” Ms. Milos said.  

Regardless of result, the cost of litigation to carriers is significant. This has triggered carriers to begin to dig into the data and look for future solutions to pandemic coverage.

“The data the industry has gathered as a result of the COVID pandemic will assist the industry in developing rating models and assist in establishing products that are more responsibly priced in the marketplace to address these pandemic risks,” explains Ms. Milos.  


Get caught up on Part I to learn more about why business interruption insurance was never intended to cover pandemic losses.

Tags: Community, Issues & Trends, COVID-19, Regulatory/Compliance, New/Emerging Risks, Legislation & Regulation, AAIS News & Views, AAIS Insights, AAIS Webinar Series, pandemic, Business Interruption, AAIS Views, GLC

Nicole Milos

Written by Nicole Milos

Nicole Milos is Assistant Counsel for AAIS. She has extensive litigation experience, with most of her practice focusing on insurance law and compliance. Prior to coming to AAIS, Nicole was a partner with the Chicago law firm, Cremer, Spina, Shaughnessy, Jansen + Siegert. Nicole serves as a member of the AAIS COVID-19 Task Force, the President of the Advisory Counsel for the Pro Bono Network, Past President of the Illinois Defense Counsel and as a member of DRI. She earned her BS from Saint Mary’s College and JD from John Marshall Law School.

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