The pandemic has exposed a shortcoming in traditional insurance to cover business interruption
Under the scheme, which was detailed in a white paper this month, the government would provide a guarantee or backstop and would be “two layers away” from initial capital outlays, which would largely be taken care of by pooled insurance industry funds and private capital, said Neal.Article content continuedTo illustrate his point, he said governments around the world have committed an estimated $16 trillion in emergency pandemic aid — ranging from loans to wage and rent supports.
Part of the drive behind this new model is that the pandemic has exposed a shortcoming in traditional insurance to cover business interruption. The wording of conventional policies does not generally contemplate shutdowns without damage to the premises.Article content continued The global headquarters of Lloyd’s of London syndicate and global specialty insurance underwriter, in London.
Kleffner said the pandemic has made a strong case for some form of shared private-public insurance because the claims involved — if they were to be paid out — would be “so enormous the insurance industry could not cover it.” Government would still need to step in, she said.Article content continued “Would be beneficial for the Canadian government to participate in or develop these kind of structures to address systemic risks and improve resilience in the long term? My answer is yes,” she said.
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