U.S. business reimbursement system broke down during the coronavirus pandemic
A scandal has erupted in the U.S. with insurers refusing to make payments to businesses in connection with the coronavirus. After receiving claims for multibillion-dollar payouts across the country, U.S. insurers said that the damage from the pandemic was not covered by insurance.
The claims come from companies that operate about one trillion dollars of GDP.
The private indemnity system built by U.S. financiers has been collecting premiums for business interruption insurance for 20 years and suddenly the U.S. says the pandemic is not an insurance event and no one will get the money.
The most active position in the fight for insurance payments was taken by companies in New York, where 162,000 people were affected by the coronavirus infection and 12,800 died.
The course of the conflict
New York businesses in several service industries were shut down in early March, and yet that is where about three million workers are employed – 35% of the metropolis’ population.
As is customary in the States, insurers are taking advantage of a legalized form of corruption: lobbyism. They defend their interests in Washington on a fee-for-service basis allowed there.
In response, insured companies representing 15.5 million workers have banded together to protect their interests. So far, Trump has sided with the victims. Paid lobbyists on both sides are working in the offices of government officials.
The greatest public attention in the fight against the insurance organizations has come from New York’s Simon Wiesenthal Center for Holocaust Studies, which has sued the largest insurer, Chubb, in federal district court in Los Angeles.
The center is seeking a decision in principle common to all victims that it is illegal to deny pandemic force majeure insurance benefits. The plaintiff is understandable: the organization has been paying insurance premiums fairly for decades, and now is being unfairly denied payments.
Chubb will be judged by a jury of 23 ordinary citizens.
The U.S. government’s proclaimed system of compensating businesses doesn’t work because it doesn’t benefit insurance company financiers. It is more profitable to sue than to pay the bills. The trial will last for several years, and distressed companies need help now.
By the time the trial is over, many of them will have ceased to exist and gone bankrupt, and millions of people will be on the street in line for food stamps. “The invisible hand of the market” does not give money away without government intervention.
“Chubb is the largest global insurance company, uniting more than 200 insurers under its control through “daughters” worldwide, among which in Russia through a British subsidiary controlled by two insurance companies licensed by the Central Bank. They made more than 650 million rubles in profit on the Russian insurance market in 2018 alone.