In May 2020, we conducted a national online survey of 802 jury-qualified U.S. citizens. The survey was designed to analyze people’s experiences and opinions about insurance and business interruption policy provisions in the wake of the COVID-19 pandemic. Each respondent answered questions about their general attitudes toward the insurance industry, their personal experiences with insurance companies and filing claims, their specific opinions regarding business interruption claims filed due to the coronavirus outbreak, and the personal impact the COVID-19 pandemic has had on their lives.
General Attitudes about the Insurance Industry
Overall, respondents had neutral to positive views of insurance companies. Only 12.4% of participants indicated that they had ‘somewhat negative’ or ‘very negative’ opinions of insurance companies, compared to 51.1% who were ‘somewhat positive’ or ‘very positive.’ The remaining 36.5% of respondents were neutral. When it came to how fair people thought insurance companies were when handling claims, nearly three quarters of participants thought insurance companies were either ‘very’ or ‘somewhat’ fair. The same pattern emerged when respondents were specifically asked about how fairly they expected insurance companies to handle COVID-19 claims. Participants in this survey, by and large, had positive attitudes toward the insurance industry which translated into high expectations of the industry’s handling of claims arising out of the pandemic.
Personal Experiences with Insurance
More than 60% of respondents have themselves or had a family member that currently own or owned a business in the past. However, only 13.8% had ever filed an insurance claim for a business loss and more than two thirds stated they only understood some or little of what their insurance policies covered and did not cover. Despite their generally positive attitude toward insurance companies, nearly 40% indicated they had been treated unfairly by insurers. Regarding claims related to the COVID-19 pandemic, only about 18% of participants have filed or plan to file a business insurance claim. Of those respondents who have filed or plan to file a claim, nearly 59% expect their claim to be completely covered, 36% believe they will be partially covered, and only 5% expect their claim to be denied.
Business Interruption Insurance & COVID-19
As we assumed most people in the general population are not very familiar with business insurance policies, we provided very basic information about business interruption insurance in the survey before asking participants their opinions about it. The information provided was designed to be as neutral as possible and not influence responses one way or the other:
Approximately two thirds of participants considered the reduced or non-operation of a business as a result of the COVID-19 pandemic to be a direct physical loss. However, responses were more mixed when asked if they believed insurance companies should cover these COVID-19 claims filed under a business’ general property policy. While a slight majority of respondents are ‘not sure’ if businesses’ general property insurance should cover coronavirus related losses, 42.1% believe that it should. Slightly less than 10% believed COVID-19 claims should not be covered.
When given two scenarios regarding “stay at home” orders (civil authority policy provisions) and their effect on business operations, over half of people (58.5%) think a business should be able to recover money from business interruption insurance even if the business can still operate in a modified way. Respondents were then given a second set of scenarios concerning income loss as a result of limited resources needed to continue regular business operations (contingent business income loss). Even more participants (71.4%) believed that those businesses should be able to recover any loss of income from their business interruption insurance instead of having to change their business operations and adapt so that they can still conduct business.
Interestingly, while 45% of respondents believed that insurance companies should fully reimburse businesses for all lost profits and revenue that occur during the pandemic, another option also gained some traction. Over 40% of participants believed that insurance companies should be required to pay for businesses to fully clean and sanitize their physical locations but should not have to pay for all lost income.
However, illustrating the uncertainty that jurors will have about deciding these issues, about half of our sample believed that insurance companies
should be obligated to cover all financial losses suffered by their insured businesses during the COVID-19 pandemic—regardless of what is written in the policy. Problematically, over half of the respondents do not care what the written policy actually says and believe the insured should be fully covered for all losses.
Personal Impact of COVID-19
Lastly, we asked participants if and how they had been affected by the coronavirus outbreak. Unsurprisingly, most respondents have been personally impacted by the pandemic with only about 22% indicating they have not been affected at all. Of those respondents who have been ‘slightly,’ ‘moderately,’ or ‘hugely’ personally impacted by COVID-19, about two thirds have been financially impacted, having lost or reduced income. Nearly a third reported being emotionally affected by the pandemic, meaning that they know someone who has contracted or has died from the virus, and only 4.2% have contracted the virus themselves.
In order to analyze whether the personal impact of COVID-19 had an effect on the way people responded to the survey, we created two separate groups of respondents. The high-impact group is comprised of participants who indicated they have been ‘hugely’ or ‘moderately’ affected by the pandemic. The low-impact group consists of participants who indicated they have not been affected by the pandemic or have only been ‘slightly’ affected. Separating respondents into these two groups nearly split them down the middle with about 53% in the high-impact group and 47% in the low-impact group.
Results showed that those in the low-impact group were significantly more likely to believe that businesses’ general property insurance should not cover revenue that was lost during the COVID-19 pandemic. Even though a small percentage of respondents overall believed this (9.6%), 62.3% of those participants were in the low-impact group. Likewise, those in the high-impact group were significantly more likely to believe that lost revenue caused by the pandemic should be covered by businesses’ general property insurance. Of those respondents who believed general property insurance should cover the lost revenue, 59.2% were in the high-impact group.
Results also illustrated that high-impact participants were significantly more likely to think that insurance companies should be obligated to cover all financial losses suffered by businesses during the pandemic, regardless of what is actually written in their policy. Of the all the respondents who believed that, 57.2% were in the high-impact group. Similarly, low-impact respondents were more likely to believe that insurance companies should not be obligated to cover all of these losses, with 52.3% of all participants who believe this falling into the low-impact group. While the effects from these results are somewhat smaller than the previous results, they are still statistically significant.
Overall, this survey shows contrasting results that need to be carefully evaluated when trying cases involving these issues. People have relatively positive views of insurance companies, but a large percentage (almost 40%) have themselves or have had someone close to them treated unfairly by insurers. Less than 30% of respondents fully understand their insurance coverage, and so most have high expectations they have for insurers in the way they interpret policy provisions and handle claims. As a result, many are willing to interpret “direct physical loss” provisions or to ignore policy language altogether in order to get businesses coverage during this unprecedented time. However, this survey also indicates that respondents were somewhat receptive to an insurance company providing mitigation coverage rather than full reimbursement for lost revenue. Not surprisingly, this survey also demonstrates that people who have not been personally impacted, or have been only mildly impacted, by the coronavirus outbreak are more likely to be friendly toward insurance companies compared to those who have been highly affected by the pandemic.
For a more in-depth analysis of these results, please feel free to contact Richard Gabriel at Decision Analysis: email@example.com
Note on survey design: While the questions in this survey were constructed to capture the general attitudes of the population toward the main insurance issues involved in COVID-19 coverage disputes, they were not designed to capture the full complexity of the legal policy language disputes in the anticipated litigation.