Insurance that was written to cover pandemics, and insurance that wasn’t

What’s the worst single insurance-law idea you could bring to bear on the COVID-19 outbreak? How about passing a law to require insurers to cover pandemic-related business interruption even if their policies explicitly named and excluded coverage of that risk? My new post at Cato criticizes bills afoot in the Ohio, New Jersey, Massachusetts, and New York legislatures: “The fact that this category of risk has been widely grasped for many years is among the reasons why state legislatures should absolutely not be permitted to enact legislation retroactively rewriting insurance contracts to mandate pandemic-related business interruption coverage neither promised nor paid for at the time.”


  • Isn’t there, you know, a constitutional provision?

  • To the extent there is an emergency for which the insurance company’s claim settling machinery is desirable, the State can guarantee the insurance company immediate 100% reimbursement on pandemic payouts. This is not an emergency that requires theft.