Centre for Entrepreneurship, SMEs, Regions and Cities
Could insurance provide an alternative to fiscal support in crisis response?
The COVID-19 pandemic led to significant economic disruptions and revenue losses for
business impacted by workplace closure measures aimed at restraining the spread of
the virus. Governments provided extensive monetary and fiscal support to address liquidity
risks and mitigate the potential for mass insolvencies as few businesses had applicable
insurance coverage for these types of losses. This paper examines the fiscal and insurance
sector responses to the economic disruptions resulting from COVID-19 workplace closures,
the challenges to the availability of insurance coverage for this risk and some of
the challenges and risks related to large-scale fiscal support for businesses. It
also includes a discussion of the potential contribution of a loss-sharing arrangement
between governments and insurance markets for pandemic-related business interruption
losses as a means of enhancing the contribution of insurance markets to providing
financial protection in the context of future pandemics.