In most cases regarding business losses from coronavirus, insurance companies are doing what they do best: denying claims. Most of these denials are likely made in bad faith for the overriding purpose of profitability for the insurance company. After all, insurance companies follow a simple business model built on maximizing their profitability:
Revenues (i.e. premiums) – Overhead (i.e. expenses) – Claims Payouts = Profits
By denying business interruption claims—even if such claims are proper—insurance companies can increase profits. Given such bad faith practices, it is no wonder why The Hartford’s market cap is currently $12.7 Billion, Allstate’s at $32 Billion, and AIG’s an impressive $72 Billion.
The insurance company, of course, cannot state that outright denial is their objective from the start. For this reason, they will find language in the policy that they claim excludes the policy from being effective. The exclusions they will point to often concern viruses, bacteria, and micro-organisms, but rarely, if ever, do they interpret these provisions in a light favorable to the policyholder, even when explicit language in the policy covers government shutdowns.