1 00:00:00,600 --> 00:00:05,040 Speaker 1: Welcome to Prognosis. I'm Laura Carlson. It's stay two hundred 2 00:00:05,120 --> 00:00:09,040 Speaker 1: and fifty eight since coronavirus was declared a global pandemic. 3 00:00:10,200 --> 00:00:13,119 Speaker 1: Today we have a special edition of the show in 4 00:00:13,200 --> 00:00:18,680 Speaker 1: collaboration with Bloomberg Law posted by David Schultz. Business Interrupted 5 00:00:18,760 --> 00:00:23,599 Speaker 1: is a special investigation podcast. Bloomberg Law reporters examined how 6 00:00:23,680 --> 00:00:28,360 Speaker 1: businesses of every stripe, large and small, assumed they had 7 00:00:28,440 --> 00:00:31,680 Speaker 1: insurance that covered them in the event of a shutdown, 8 00:00:32,360 --> 00:00:37,440 Speaker 1: and how those assumptions were by and large wrong. The 9 00:00:37,440 --> 00:00:42,320 Speaker 1: Bloomberg Law team looked into so called virus exclusion clauses 10 00:00:42,680 --> 00:00:47,200 Speaker 1: that insurers quietly inserted into many of their business policies, 11 00:00:47,800 --> 00:00:52,519 Speaker 1: and how those clauses are now creating major strife between 12 00:00:52,560 --> 00:00:58,840 Speaker 1: insurers and their policy holders. Here's David Schultz with more. 13 00:01:03,440 --> 00:01:06,640 Speaker 1: It's hard to run a business, really hard. And I'm 14 00:01:06,680 --> 00:01:09,080 Speaker 1: not talking about how it's difficult to make stuff or 15 00:01:09,200 --> 00:01:12,120 Speaker 1: then convince someone to exchange their money for your stuff. 16 00:01:12,640 --> 00:01:15,399 Speaker 1: It's hard because there's just so much unforeseeable stuff that 17 00:01:15,400 --> 00:01:18,240 Speaker 1: can happen. A ship bing gets damaged, someone slips and 18 00:01:18,240 --> 00:01:20,679 Speaker 1: falls in your aisle, there's a fire in the place 19 00:01:20,720 --> 00:01:22,600 Speaker 1: next door. All of these are things that can wreak 20 00:01:22,680 --> 00:01:26,880 Speaker 1: havoc on even a successful business. Also, this Broadway has 21 00:01:26,920 --> 00:01:30,319 Speaker 1: extended its shutdown shutdown or shut it down start over 22 00:01:30,319 --> 00:01:35,440 Speaker 1: shutdown plan in New York City. This is why insurance exists. 23 00:01:35,720 --> 00:01:38,640 Speaker 1: It can help mitigate the risk of, say, a worldwide 24 00:01:38,640 --> 00:01:41,400 Speaker 1: pandemic that shuts down Way. It feels like the entire world. 25 00:01:42,080 --> 00:01:44,279 Speaker 1: And there actually is a type of insurance that covers 26 00:01:44,600 --> 00:01:48,720 Speaker 1: this exact type of thing. It's called business interruption insurance. 27 00:01:48,920 --> 00:01:51,520 Speaker 1: And a lot of businesses across the country and the 28 00:01:51,560 --> 00:01:55,240 Speaker 1: world started filing claims on their business interruption policies when 29 00:01:55,320 --> 00:01:59,400 Speaker 1: all this madness began earlier this year. However, the vast 30 00:01:59,480 --> 00:02:03,880 Speaker 1: majority of those claims were denied because years ago, the 31 00:02:03,920 --> 00:02:07,760 Speaker 1: insurance companies quietly inserted clauses into all of their policies 32 00:02:08,080 --> 00:02:10,520 Speaker 1: that said they wouldn't pay out in the event of 33 00:02:10,560 --> 00:02:15,240 Speaker 1: a pandemic. It's almost as though they knew this could happen. Now. 34 00:02:15,280 --> 00:02:17,760 Speaker 1: I'm not saying that insurance companies knew that at the 35 00:02:17,840 --> 00:02:20,600 Speaker 1: end of twenty nine there would be a novel coronavirus 36 00:02:20,680 --> 00:02:23,680 Speaker 1: that originated in China and that it infects humans via 37 00:02:23,720 --> 00:02:27,400 Speaker 1: the respiratory tract. If you're looking for conspiracy theories, you 38 00:02:27,400 --> 00:02:30,239 Speaker 1: have come to the wrong podcast. But right now you 39 00:02:30,320 --> 00:02:33,840 Speaker 1: might be asking yourself, what podcast did I come to? Well, 40 00:02:33,960 --> 00:02:37,760 Speaker 1: you're listening to Business Interrupted from Bloomberg Industry Group, and 41 00:02:37,800 --> 00:02:40,760 Speaker 1: I'm your host, David Schultz. This is a podcast about 42 00:02:40,760 --> 00:02:44,120 Speaker 1: how businesses of every stripe, large, small, you name it, 43 00:02:44,360 --> 00:02:46,680 Speaker 1: assume they had insurance that covered them in the event 44 00:02:46,720 --> 00:02:49,760 Speaker 1: of a shutdown, and how those assumptions were by and 45 00:02:49,880 --> 00:02:53,920 Speaker 1: large wrong. You'll hear from myself, along with Bloomberg reporters 46 00:02:54,000 --> 00:02:56,880 Speaker 1: Lydia Bayout and Evan Weinberger from our corporate desk, and 47 00:02:56,960 --> 00:02:59,600 Speaker 1: David Hood from our tax desk, about what happened to 48 00:02:59,639 --> 00:03:07,799 Speaker 1: those this is why, and what might happen next. So 49 00:03:07,919 --> 00:03:10,000 Speaker 1: back to what I was saying earlier, you might not 50 00:03:10,080 --> 00:03:13,200 Speaker 1: have seen the pandemic coming, but the insurance industry knew 51 00:03:13,280 --> 00:03:16,200 Speaker 1: it might happen. Insurres did their homework and realized it 52 00:03:16,240 --> 00:03:19,000 Speaker 1: was likely there would be a pandemic of some kind 53 00:03:19,360 --> 00:03:23,240 Speaker 1: at some point, that it was in fact foreseeable. They 54 00:03:23,280 --> 00:03:25,960 Speaker 1: paid very close attention to the stars outbreak back in 55 00:03:26,000 --> 00:03:29,600 Speaker 1: the two thousands, and he's becoming more aggressive the number 56 00:03:29,639 --> 00:03:33,399 Speaker 1: of victims expected to triple within weights, and they learned 57 00:03:33,440 --> 00:03:37,160 Speaker 1: lessons that other industries and even many governments didn't. How 58 00:03:37,160 --> 00:03:39,600 Speaker 1: do we know this, It's all in the policies that 59 00:03:39,640 --> 00:03:43,880 Speaker 1: they wrote. Well, most commercial property policies contain what is 60 00:03:43,960 --> 00:03:48,320 Speaker 1: the so called virus exclusion the quote exclusion of last 61 00:03:48,400 --> 00:03:52,000 Speaker 1: due to virus or bacteria unquote. That's Scott Seamen, a 62 00:03:52,080 --> 00:03:55,240 Speaker 1: Chicago based attorney with the firm Hinshaw and Culbertson who 63 00:03:55,280 --> 00:03:59,040 Speaker 1: represents insurers and the commercial property policies. He's talking about 64 00:03:59,240 --> 00:04:03,440 Speaker 1: our insurance held by many, many businesses. It's called business 65 00:04:03,440 --> 00:04:06,440 Speaker 1: interruption insurance, and it's supposed to pay out if something 66 00:04:06,480 --> 00:04:08,560 Speaker 1: out of your control happens and forces your business to 67 00:04:08,600 --> 00:04:11,400 Speaker 1: shut down. It's supposed to replace some or maybe even 68 00:04:11,440 --> 00:04:14,320 Speaker 1: most of the revenue you lost during a shutdown. But, 69 00:04:14,560 --> 00:04:17,440 Speaker 1: as Scott Seaman just said, nearly all of the business 70 00:04:17,520 --> 00:04:21,400 Speaker 1: interruption policies issued by nearly every insurance company, not all, 71 00:04:21,440 --> 00:04:25,039 Speaker 1: but just about all came with a virus exclusion attached. 72 00:04:25,440 --> 00:04:28,600 Speaker 1: This amendment specifically stated that the policy will not pay 73 00:04:28,600 --> 00:04:31,560 Speaker 1: out if a business is shut down due to a pandemic, 74 00:04:31,920 --> 00:04:35,800 Speaker 1: and that's no accident. The introduction of virus exclusions was 75 00:04:35,839 --> 00:04:39,040 Speaker 1: a direct response to the last time a coronavirus threatened 76 00:04:39,080 --> 00:04:44,960 Speaker 1: to infect all of mankind, the Stars epidemic. That epidemic 77 00:04:45,000 --> 00:04:47,720 Speaker 1: caused some shutdowns in a few countries, but even then 78 00:04:47,760 --> 00:04:51,200 Speaker 1: the claims were hefty, including one that reportedly totaled sixteen 79 00:04:51,200 --> 00:04:54,920 Speaker 1: million dollars to an international hotel chain. Insurers saw this, 80 00:04:55,160 --> 00:04:56,760 Speaker 1: it realized how much they'd have to pay out if 81 00:04:56,760 --> 00:05:00,279 Speaker 1: a pandemic caused global shutdowns, and then quickly got to 82 00:05:00,279 --> 00:05:03,360 Speaker 1: work adding these exclusions in. But while the insurers knew 83 00:05:03,360 --> 00:05:06,719 Speaker 1: a global pandemic was possible, if not likely, the business 84 00:05:06,720 --> 00:05:10,800 Speaker 1: owners who purchased their policies did not take Julia Mayor, 85 00:05:10,960 --> 00:05:13,840 Speaker 1: the owner of a cafe and restaurant in Santa Barbara, California, 86 00:05:14,200 --> 00:05:16,760 Speaker 1: She called her insurance broker right after the first COVID 87 00:05:16,839 --> 00:05:19,520 Speaker 1: stay at home owners were issued and at that point 88 00:05:19,520 --> 00:05:22,960 Speaker 1: are broker said, you do not have virus coverage and 89 00:05:23,000 --> 00:05:26,280 Speaker 1: you do not have pandemic coverage, so there will not 90 00:05:26,440 --> 00:05:30,640 Speaker 1: be any ability for you to access your insurance. And 91 00:05:30,680 --> 00:05:34,720 Speaker 1: that was a very big shock for me to hear 92 00:05:34,760 --> 00:05:37,920 Speaker 1: because I didn't expect that at all. I didn't expect 93 00:05:38,120 --> 00:05:41,760 Speaker 1: my question wasn't am I covered? It was more when 94 00:05:41,800 --> 00:05:44,560 Speaker 1: will this coverage kick in? As a result, instead of 95 00:05:44,640 --> 00:05:47,240 Speaker 1: hunkering down and using her insurance money to dread water, 96 00:05:47,720 --> 00:05:51,479 Speaker 1: Julia is barely staying in business and she's not alone. 97 00:05:51,720 --> 00:05:54,400 Speaker 1: Business Owners across the country are getting their business interruption 98 00:05:54,400 --> 00:05:58,320 Speaker 1: claims denied and denied fast, in some cases, within hours 99 00:05:58,360 --> 00:06:01,560 Speaker 1: of filing them. So this might seem like a simple story, right, 100 00:06:01,600 --> 00:06:04,760 Speaker 1: It's just those greedy insurance companies again, happy to collect 101 00:06:04,760 --> 00:06:07,480 Speaker 1: your annual premiums, but always trying to avoid paying out 102 00:06:07,480 --> 00:06:09,640 Speaker 1: a claim. And if you're a business owner like Juliet 103 00:06:09,640 --> 00:06:12,200 Speaker 1: who's had her claim denied, that might be it. But 104 00:06:12,279 --> 00:06:15,080 Speaker 1: the truth is it's actually much more complicated. If you 105 00:06:15,080 --> 00:06:17,560 Speaker 1: start taking around looking at the origins of this virus 106 00:06:17,560 --> 00:06:20,480 Speaker 1: exclusion and why it was even created, you wind up 107 00:06:20,480 --> 00:06:24,200 Speaker 1: with existential questions about what insurance even is and why 108 00:06:24,200 --> 00:06:29,240 Speaker 1: it exists in the first place. And podcast listeners, those 109 00:06:29,279 --> 00:06:31,720 Speaker 1: are the questions we're going to ask, We're gonna look 110 00:06:31,760 --> 00:06:33,960 Speaker 1: at buy So many companies that thought they were covered 111 00:06:34,000 --> 00:06:37,039 Speaker 1: were in fact not what this means for them, and 112 00:06:37,080 --> 00:06:40,000 Speaker 1: why the insurance industry maybe winning the battle but losing 113 00:06:40,040 --> 00:06:43,720 Speaker 1: the war We'll hear from coffee roasters, theater owners, restaurateurs, 114 00:06:43,960 --> 00:06:48,479 Speaker 1: angry politicians, frustrated insurance regulators, the Houston Rockets, and, for 115 00:06:48,560 --> 00:06:53,000 Speaker 1: good measure, Benjamin Franklin. All will be explained. Stay with us, 116 00:07:04,440 --> 00:07:07,200 Speaker 1: those nine justices in Washington that could be pretty hard 117 00:07:07,200 --> 00:07:09,440 Speaker 1: to keep track up. That's where we come in. I'm 118 00:07:09,520 --> 00:07:13,120 Speaker 1: Jordan Reuben and I'm Kimberly Robinson. On our podcast, Cases 119 00:07:13,120 --> 00:07:15,560 Speaker 1: and Controversies, we give you a week by week accounting 120 00:07:15,720 --> 00:07:18,840 Speaker 1: of the Supreme Court, the filings, the arguments, the opinions, 121 00:07:19,040 --> 00:07:21,800 Speaker 1: and much much more. So check in on Fridays with 122 00:07:21,880 --> 00:07:24,440 Speaker 1: Cases and Controversies to find out what's coming up on 123 00:07:24,480 --> 00:07:28,000 Speaker 1: the horizon at the Supreme Court. Download and subscribe wherever 124 00:07:28,040 --> 00:07:31,280 Speaker 1: you get your podcasts. So before we go any further, 125 00:07:31,400 --> 00:07:32,880 Speaker 1: we all have to be on the same page about 126 00:07:32,920 --> 00:07:35,840 Speaker 1: what insurance actually is. This is the point of the 127 00:07:35,840 --> 00:07:37,480 Speaker 1: podcast where I might play a clip from one of 128 00:07:37,520 --> 00:07:40,320 Speaker 1: those old timey nineteen fifties instructional videos at the use 129 00:07:40,400 --> 00:07:43,520 Speaker 1: of showing high school economics class but I'm not going 130 00:07:43,560 --> 00:07:45,560 Speaker 1: to do that. Instead, I'm gonna go all the way 131 00:07:45,600 --> 00:07:48,280 Speaker 1: back to the beginning, back when modern property insurance. As 132 00:07:48,360 --> 00:07:51,160 Speaker 1: we know it today. Was basically first conceived by this guy. 133 00:07:51,680 --> 00:07:59,160 Speaker 1: You may have heard of him, Benjamin Franklin. Yes, that 134 00:07:59,360 --> 00:08:03,080 Speaker 1: Benjamin Glinn. Long before he graced the bill, before he 135 00:08:03,080 --> 00:08:06,760 Speaker 1: even signed the Declaration of Independence, Franklin started the Philadelphia 136 00:08:06,800 --> 00:08:10,160 Speaker 1: Contributorship for the Insurance of Houses from Losses by Fire. 137 00:08:10,680 --> 00:08:12,440 Speaker 1: If they were around today, it would probably be called 138 00:08:12,440 --> 00:08:15,360 Speaker 1: the pc I HLF. But that's neither here nor there. 139 00:08:15,800 --> 00:08:18,720 Speaker 1: Franklin didn't invent insurance, but he did help to invent 140 00:08:18,760 --> 00:08:22,080 Speaker 1: property and casualty insurance, and importantly, or at least importantly 141 00:08:22,120 --> 00:08:25,440 Speaker 1: for the purposes of this podcast, the pc I HLF 142 00:08:25,920 --> 00:08:28,640 Speaker 1: was the first insurance company to inspect properties and issue 143 00:08:28,680 --> 00:08:31,680 Speaker 1: policies based on their risk. If your home was made 144 00:08:31,720 --> 00:08:34,960 Speaker 1: of faulty materials or restore flammable materials in your basement, 145 00:08:35,280 --> 00:08:38,600 Speaker 1: no policy for you. Why was it such a big 146 00:08:38,640 --> 00:08:41,680 Speaker 1: innovation because it allowed the insurer to manage its own risk, 147 00:08:41,840 --> 00:08:44,079 Speaker 1: the risk of having to pay out more in claims 148 00:08:44,080 --> 00:08:46,839 Speaker 1: than it's actually collected. As long as everyone's house doesn't 149 00:08:46,840 --> 00:08:49,040 Speaker 1: catch on fire all at the same time, if you're fine, 150 00:08:49,440 --> 00:08:52,200 Speaker 1: your policy holders pay their premiums. Their houses don't catch 151 00:08:52,200 --> 00:08:55,280 Speaker 1: on fire, so they don't file claims, but when they do, 152 00:08:55,559 --> 00:08:59,320 Speaker 1: you can afford it because you've insured lower risk houses. Hopefully. 153 00:08:59,440 --> 00:09:01,920 Speaker 1: That's a really fundamental principle. And here's another way to 154 00:09:01,960 --> 00:09:04,520 Speaker 1: put it. This is Dani Schwarz, a law professor at 155 00:09:04,520 --> 00:09:08,000 Speaker 1: the University of Minnesota who specializes in insurance. The broad 156 00:09:08,080 --> 00:09:10,680 Speaker 1: principle is one that's been around for for really the 157 00:09:10,760 --> 00:09:14,800 Speaker 1: history of insurance, which is, insurers thrive when they can 158 00:09:15,520 --> 00:09:18,720 Speaker 1: ensure risks that are not correlated with one another. So 159 00:09:18,800 --> 00:09:21,880 Speaker 1: insurers like to find risks that are not correlated, and 160 00:09:21,920 --> 00:09:23,480 Speaker 1: so then that's the question of, okay, well, how do 161 00:09:23,520 --> 00:09:27,760 Speaker 1: you identify correlated risks? And so historically there were exclusions 162 00:09:27,800 --> 00:09:32,520 Speaker 1: for war, there were exclusions for earthquakes, or exclusions for floods, 163 00:09:32,559 --> 00:09:36,800 Speaker 1: lots of events that could simultaneously result in coverage for 164 00:09:37,120 --> 00:09:42,880 Speaker 1: policy holders. That is a really important point. Insurers don't 165 00:09:42,920 --> 00:09:45,319 Speaker 1: want to cover events that could cause all of their 166 00:09:45,320 --> 00:09:48,440 Speaker 1: policy holders defile claims all at the same time. In 167 00:09:48,440 --> 00:09:51,400 Speaker 1: other words, and unforseeable event is okay as long as 168 00:09:51,400 --> 00:09:54,880 Speaker 1: it's both unforeseeable and discreet. But what does that mean 169 00:09:54,920 --> 00:09:57,800 Speaker 1: for small businesses small business owners. Let's say, for example, 170 00:09:57,840 --> 00:10:00,800 Speaker 1: a cafe owner in Santa Barbara, California. They're just trying 171 00:10:00,840 --> 00:10:02,920 Speaker 1: to earn revenue and not go out of business. A 172 00:10:02,960 --> 00:10:05,560 Speaker 1: business insurance policy is something they know they have to get, 173 00:10:05,920 --> 00:10:08,440 Speaker 1: but for most small entrepreneurs it's probably not among the 174 00:10:08,480 --> 00:10:11,200 Speaker 1: top one hundred most important decisions they have to make 175 00:10:11,240 --> 00:10:14,360 Speaker 1: in running their business. However, there are now a whole 176 00:10:14,400 --> 00:10:16,800 Speaker 1: lot of business owners who are really wishing they spent 177 00:10:16,880 --> 00:10:20,280 Speaker 1: more time looking over the insurance policies they assigned years ago. 178 00:10:20,800 --> 00:10:22,680 Speaker 1: And this isn't just a big business thing or a 179 00:10:22,720 --> 00:10:25,679 Speaker 1: small business thing. It's not limited to one industrial sector 180 00:10:25,880 --> 00:10:28,720 Speaker 1: or one part of the country. Celebrity chefs are having 181 00:10:28,720 --> 00:10:31,960 Speaker 1: problems with their insurance. Big clothing retailers are having problems, 182 00:10:32,240 --> 00:10:35,280 Speaker 1: and even the NBA's Houston Rockets filed the lawsuit after 183 00:10:35,280 --> 00:10:41,560 Speaker 1: their business interruption claim was my apologies rejected Bloomberg Laws. 184 00:10:41,640 --> 00:10:44,480 Speaker 1: Lydia b you didn't speak with James Harden, but she 185 00:10:44,559 --> 00:10:46,400 Speaker 1: did speak with a lot of small business owners and 186 00:10:46,400 --> 00:10:49,160 Speaker 1: she says, right now, many feel like they were sold 187 00:10:49,280 --> 00:10:52,320 Speaker 1: a bill of goods. Lydia takes over the story from here. 188 00:10:52,520 --> 00:10:55,640 Speaker 1: Julia Meyer, the cafe owner we heard from earlier, has 189 00:10:55,720 --> 00:11:00,240 Speaker 1: had truly awful luck with her business Interruption Insurance. The 190 00:11:00,280 --> 00:11:02,800 Speaker 1: claim she filed this year after the pandemic shut her 191 00:11:02,800 --> 00:11:05,640 Speaker 1: cafe down wasn't the first time she thought her policy 192 00:11:05,679 --> 00:11:11,079 Speaker 1: would cover her but didn't. Back in, wildfires burned hundreds 193 00:11:11,120 --> 00:11:14,320 Speaker 1: of thousands of acres in and around Santa Barbara, where 194 00:11:14,320 --> 00:11:18,160 Speaker 1: her cafe is located. Huge parts of the southern California 195 00:11:18,200 --> 00:11:21,120 Speaker 1: town were evacuated. So we were watching the fire kind 196 00:11:21,120 --> 00:11:27,560 Speaker 1: of come across our city and they were evacuating block 197 00:11:27,640 --> 00:11:31,760 Speaker 1: by block. Julia actually proactively called her insure before she 198 00:11:31,800 --> 00:11:34,439 Speaker 1: shut down her cafe. Are Insurance said, well, once you're 199 00:11:34,840 --> 00:11:39,320 Speaker 1: once your business falls into a mandatory evacuation, you we 200 00:11:39,400 --> 00:11:44,040 Speaker 1: can talk. And we were one block away from the 201 00:11:44,040 --> 00:11:49,120 Speaker 1: mandatory evacuation. That's the thing that time, Julius policy only 202 00:11:49,240 --> 00:11:52,120 Speaker 1: kicked in if the government forced her business to shut down. 203 00:11:52,720 --> 00:11:54,840 Speaker 1: It didn't matter that she couldn't have kept her cafe 204 00:11:54,960 --> 00:11:58,120 Speaker 1: open anyway. There weren't many customers lining up to eat 205 00:11:58,120 --> 00:12:01,480 Speaker 1: sandwiches and drink coffee with a wild fire looming. The 206 00:12:01,559 --> 00:12:05,920 Speaker 1: policy required a ruling that's called a civil authority. Then, 207 00:12:06,280 --> 00:12:09,880 Speaker 1: less than a month later, heavy rains came and with 208 00:12:09,920 --> 00:12:14,400 Speaker 1: the landscape charred from the fires, mud slides became a problem. 209 00:12:14,440 --> 00:12:17,600 Speaker 1: They are finding many cars. We don't know where those 210 00:12:17,679 --> 00:12:21,400 Speaker 1: vehicles were parked last night, sometime after the rain came, 211 00:12:21,679 --> 00:12:25,880 Speaker 1: mud surrounded them and carried them off. In fact, they 212 00:12:25,880 --> 00:12:28,800 Speaker 1: were so bad they blocked the main highways leading in 213 00:12:29,000 --> 00:12:33,120 Speaker 1: or out of the town. Julia thought, well, if people 214 00:12:33,160 --> 00:12:36,120 Speaker 1: can't access my business because a civil authority shut down 215 00:12:36,160 --> 00:12:40,240 Speaker 1: the roads, maybe that fits the criteria. So she tried 216 00:12:40,320 --> 00:12:43,720 Speaker 1: again and reopened her already denied claim. But no luck. 217 00:12:43,840 --> 00:12:48,720 Speaker 1: That was also denied because again we could get into 218 00:12:48,800 --> 00:12:53,120 Speaker 1: our doors. Ultimately, Julia says she lost two months of 219 00:12:53,160 --> 00:12:56,000 Speaker 1: revenue and survived only thanks to a loan from the 220 00:12:56,040 --> 00:13:02,720 Speaker 1: Federal Small Business Administration. Bonnie Shock is also no stranger 221 00:13:02,760 --> 00:13:06,240 Speaker 1: to how insurance companies work, but that's because it runs 222 00:13:06,240 --> 00:13:09,160 Speaker 1: in her family. My father happened to be UM, an 223 00:13:09,200 --> 00:13:12,960 Speaker 1: insurance underwriter, and I'm married to an insurance adjuster UM, 224 00:13:13,040 --> 00:13:15,920 Speaker 1: so I've been around the industry quite a lot in 225 00:13:15,960 --> 00:13:19,319 Speaker 1: my life. Bonnie runs the Fox Theater, a one thousand, 226 00:13:19,440 --> 00:13:24,560 Speaker 1: one hundred and sixty four seat venue in downtown Tucson, Arizona. Fox, 227 00:13:26,240 --> 00:13:29,680 Speaker 1: Like Julia, Bonnie submitted a business interruption claim after the 228 00:13:29,720 --> 00:13:34,320 Speaker 1: pandemic hit, and like Julia, it was denied and the 229 00:13:34,320 --> 00:13:37,240 Speaker 1: Fox theater actually had an endorsement and its policy that 230 00:13:37,360 --> 00:13:41,920 Speaker 1: covered communicable disease. So our communicable diseases endorsement, one would 231 00:13:41,960 --> 00:13:45,200 Speaker 1: think we would have been paid out on, but in 232 00:13:45,280 --> 00:13:48,880 Speaker 1: fact that it's not the case because um, in that instance, uh, 233 00:13:49,000 --> 00:13:54,480 Speaker 1: the policy requires that there actually be an incidence of 234 00:13:54,640 --> 00:14:00,160 Speaker 1: disease in the space that requires the shutdown. Because this 235 00:14:00,240 --> 00:14:04,240 Speaker 1: is a circumstance where the shutdown is related to the 236 00:14:04,400 --> 00:14:10,880 Speaker 1: possibility and the and the UH avoidance of such a 237 00:14:11,120 --> 00:14:14,520 Speaker 1: of of such an incidence, that that portion of the 238 00:14:14,559 --> 00:14:16,800 Speaker 1: policy and that endorsement did not pay off. So, just 239 00:14:17,000 --> 00:14:20,600 Speaker 1: to drive that point home, Bonnie's claim would have been 240 00:14:20,600 --> 00:14:23,680 Speaker 1: paid out had there been an actual case of COVID 241 00:14:23,760 --> 00:14:28,640 Speaker 1: nineteen at the theater. The policy requires that there actually 242 00:14:28,720 --> 00:14:33,080 Speaker 1: be an incidence of disease. But because the Fox was 243 00:14:33,120 --> 00:14:38,480 Speaker 1: shut down preemptively to prevent the spread, no dice. If 244 00:14:38,520 --> 00:14:41,080 Speaker 1: that claim had been paid at the beginning of the pandemic, 245 00:14:41,600 --> 00:14:44,320 Speaker 1: Bonnie says, the Fox could have avoided a lot of 246 00:14:44,360 --> 00:14:49,160 Speaker 1: the struggles that followed. So, um, we are that very 247 00:14:49,200 --> 00:14:53,600 Speaker 1: particular type of operation that simply cannot operate now, and 248 00:14:53,640 --> 00:14:58,760 Speaker 1: what we're learning, unfortunately, is just how important that coverage, 249 00:14:59,120 --> 00:15:01,400 Speaker 1: that that money could have been, because this is going 250 00:15:01,440 --> 00:15:07,120 Speaker 1: to extend for at least another six months before we 251 00:15:07,200 --> 00:15:10,120 Speaker 1: feel confident or in any kind of confidence whatsoever that 252 00:15:10,200 --> 00:15:12,360 Speaker 1: we would be able to start holding events again and 253 00:15:12,360 --> 00:15:19,200 Speaker 1: actually earning revenue again. Unlike Bonnie Bobby, Stucky didn't have 254 00:15:19,240 --> 00:15:21,800 Speaker 1: a lot of experience with his insurer or the insurance 255 00:15:21,840 --> 00:15:25,840 Speaker 1: industry at large before the pandemic. Stucky is a restaurateur 256 00:15:25,960 --> 00:15:30,080 Speaker 1: who owns four places in Boulder and Denver, Colorado, everything 257 00:15:30,120 --> 00:15:34,160 Speaker 1: from fine dining to fast casual pizza. He says when 258 00:15:34,160 --> 00:15:37,640 Speaker 1: this all started he wasn't really planning for the worst. Well, 259 00:15:37,680 --> 00:15:40,400 Speaker 1: I think when it first arrived, I think all of 260 00:15:40,480 --> 00:15:42,560 Speaker 1: us were a little bit of asleep at the wheel. 261 00:15:42,880 --> 00:15:44,720 Speaker 1: I mean, I think we had you know, my wife 262 00:15:44,800 --> 00:15:49,560 Speaker 1: is naturally a nervous nellie and a worry Warton bought 263 00:15:49,840 --> 00:15:55,520 Speaker 1: mass back in January, bought gloves. But I think we 264 00:15:55,520 --> 00:15:57,880 Speaker 1: were just going through our typical day. And then it 265 00:15:58,040 --> 00:16:00,720 Speaker 1: was funny. I was a guest civilier at an event 266 00:16:01,480 --> 00:16:04,600 Speaker 1: March nine in New York where they had they had 267 00:16:04,600 --> 00:16:07,840 Speaker 1: people from all over the world. There my wife and 268 00:16:07,880 --> 00:16:10,280 Speaker 1: I flew there and she gave me a kit to 269 00:16:10,440 --> 00:16:13,120 Speaker 1: go do wine service that night. She's like, okay, here's 270 00:16:13,120 --> 00:16:16,440 Speaker 1: your parrel for your pocket. I want you to wash. 271 00:16:16,600 --> 00:16:20,200 Speaker 1: You know, like we were hearing about it. But this 272 00:16:20,280 --> 00:16:22,720 Speaker 1: is how fast it crept up on us. Is That 273 00:16:22,840 --> 00:16:27,480 Speaker 1: was March ninth or tenth. By the next week, all 274 00:16:27,520 --> 00:16:32,080 Speaker 1: of America was shutting down very quickly. The gravity of 275 00:16:32,080 --> 00:16:35,760 Speaker 1: what was happening set in, and shortly after that, the 276 00:16:35,800 --> 00:16:41,360 Speaker 1: Governor of Colorado, Jared Polis, issued shutdown orders by acting boldly, 277 00:16:41,440 --> 00:16:45,480 Speaker 1: now we can limit the duration of this economic crisis 278 00:16:45,560 --> 00:16:48,000 Speaker 1: rather and I will. And I literally told my staff 279 00:16:48,040 --> 00:16:52,080 Speaker 1: in all Navite, I said, everyone was stressed out. I said, 280 00:16:52,120 --> 00:16:54,880 Speaker 1: you know what we're gonna be. Okay, I've been paying 281 00:16:54,880 --> 00:16:58,280 Speaker 1: business interruption insurance for fifteen years, that's what this is for. 282 00:16:59,720 --> 00:17:04,560 Speaker 1: I hit send on that the second we get closed 283 00:17:04,600 --> 00:17:07,359 Speaker 1: by the mayor of the governor, and that's exactly what 284 00:17:07,400 --> 00:17:11,840 Speaker 1: Bobby did. We got closed, hit send to Farmers Insurance 285 00:17:12,520 --> 00:17:15,639 Speaker 1: and I've never seen a reply come back that quick 286 00:17:16,760 --> 00:17:23,640 Speaker 1: from an insurance claim saying UH denied. That's an important detail. 287 00:17:24,440 --> 00:17:27,159 Speaker 1: We heard from several business owners who filed claims that 288 00:17:27,240 --> 00:17:31,560 Speaker 1: their claims were denied really really quickly, like within a 289 00:17:31,600 --> 00:17:35,760 Speaker 1: matter of hours. Bobby says he thinks this shows how 290 00:17:35,800 --> 00:17:39,000 Speaker 1: well prepared the insurance industry was for this pandemic. This 291 00:17:39,040 --> 00:17:41,240 Speaker 1: is not my job to be an expert of insurance, 292 00:17:41,880 --> 00:17:45,960 Speaker 1: but I do know that I would have expected at 293 00:17:46,040 --> 00:17:50,560 Speaker 1: least an investigation and maybe an on site visit if 294 00:17:50,600 --> 00:17:53,960 Speaker 1: you were going to give a denial that quick. And 295 00:17:54,280 --> 00:17:57,760 Speaker 1: my gut instinct is when you give a denial that quick, 296 00:17:58,080 --> 00:18:01,240 Speaker 1: because you can't get that community to all the insurance 297 00:18:01,400 --> 00:18:06,080 Speaker 1: employees that quick, that was probably premeditated. That they were 298 00:18:06,119 --> 00:18:10,320 Speaker 1: probably planning this about the time when my wife bought 299 00:18:10,320 --> 00:18:14,360 Speaker 1: the gloves in January. We reached out to Farmers Bobby's insurer. 300 00:18:15,200 --> 00:18:17,840 Speaker 1: In an email from their spokesperson, they didn't comment on 301 00:18:17,880 --> 00:18:21,280 Speaker 1: the speed of their denial, but on Bobby's particular claim. 302 00:18:21,320 --> 00:18:25,399 Speaker 1: They did say, quote, in this circumstance, the claim for 303 00:18:25,440 --> 00:18:29,359 Speaker 1: COVID nineteen related damages, including those resulting from governmental stay 304 00:18:29,359 --> 00:18:32,119 Speaker 1: at home orders, is not covered under the policy and 305 00:18:32,200 --> 00:18:37,080 Speaker 1: is subject to applicable policy exclusions. Unquote. That was Bloomberg 306 00:18:37,119 --> 00:18:41,720 Speaker 1: Law Financial Services reporter Lydia Bayed, So that raises the 307 00:18:41,840 --> 00:18:44,720 Speaker 1: question what exactly was the insurance industry doing in the 308 00:18:44,760 --> 00:18:47,720 Speaker 1: months leading up to the pandemic. In the weeks immediately 309 00:18:47,760 --> 00:18:50,800 Speaker 1: after all this craziness started, it seems like they really 310 00:18:50,800 --> 00:18:53,000 Speaker 1: wanted to make sure they did not have any exposure 311 00:18:53,000 --> 00:18:55,480 Speaker 1: to business interruption claims from stores that were shut down. 312 00:18:56,000 --> 00:18:59,120 Speaker 1: Were these insurers just twirling their bad guy mustaches while 313 00:18:59,240 --> 00:19:05,719 Speaker 1: laughing and count seem their policyholders money. No, No, they 314 00:19:05,720 --> 00:19:08,440 Speaker 1: were not. The truth is it wasn't that the insurance 315 00:19:08,440 --> 00:19:10,760 Speaker 1: industry didn't want to pay off business and eruption claims. 316 00:19:11,119 --> 00:19:13,640 Speaker 1: It was that the insurance felt like they couldn't Blue 317 00:19:13,680 --> 00:19:16,439 Speaker 1: Brook Laws. Evan Weinberger dug deep into the insurance industry 318 00:19:16,520 --> 00:19:19,120 Speaker 1: is thinking here, and he explains what was going on 319 00:19:19,400 --> 00:19:22,520 Speaker 1: this summer. We spoke to Ray Farmer. He's the top 320 00:19:22,560 --> 00:19:25,760 Speaker 1: insurance regulator in South Carolina and the president of the 321 00:19:25,840 --> 00:19:30,080 Speaker 1: National Association of Insurance Commissioners. And Ray got right to 322 00:19:30,119 --> 00:19:32,480 Speaker 1: the point, you know you have an ask, but I'll 323 00:19:32,480 --> 00:19:36,680 Speaker 1: tell you, in my opinion, of pandemic is not insurable. 324 00:19:36,920 --> 00:19:39,320 Speaker 1: That's a line that we heard over and over and 325 00:19:39,440 --> 00:19:42,639 Speaker 1: over and over again when we were reporting out this podcast. 326 00:19:43,280 --> 00:19:46,600 Speaker 1: Insurance can help protect you from some really catastrophic events, 327 00:19:47,040 --> 00:19:49,720 Speaker 1: but a global pandemic just isn't one of them. The 328 00:19:49,720 --> 00:19:52,440 Speaker 1: reason gets back to what Dan Schwartz, the Minnesota law 329 00:19:52,440 --> 00:19:57,200 Speaker 1: professor said earlier, the whole correlated risk thing. David Sampson, 330 00:19:57,359 --> 00:19:59,879 Speaker 1: the head of the American Property casualty insurance is so 331 00:20:00,119 --> 00:20:03,040 Speaker 1: siation breaks it down here. In other words, there are 332 00:20:03,119 --> 00:20:07,679 Speaker 1: just some risks that exists that are not ensurable risks, 333 00:20:08,560 --> 00:20:13,720 Speaker 1: and pandemics are one of those risks that are at 334 00:20:13,760 --> 00:20:20,200 Speaker 1: this point in time, largely uninsurable. The insurance product and 335 00:20:20,280 --> 00:20:27,000 Speaker 1: the insurance industry was never designed and can't design a 336 00:20:27,040 --> 00:20:32,119 Speaker 1: product that will cover the collapse for the shutdown of 337 00:20:32,160 --> 00:20:38,919 Speaker 1: an entire nation's economy all at one time. It's a 338 00:20:38,920 --> 00:20:41,879 Speaker 1: point that gets at some really fundamental questions about what 339 00:20:41,960 --> 00:20:44,840 Speaker 1: insurance actually is and what it can and can't do. 340 00:20:45,440 --> 00:20:48,400 Speaker 1: And make no mistake, if insurers did have to pay 341 00:20:48,400 --> 00:20:52,080 Speaker 1: out all or even most of the business interruption claims 342 00:20:52,119 --> 00:20:55,639 Speaker 1: they've received, it's not an exaggeration to say that lots 343 00:20:55,680 --> 00:20:59,159 Speaker 1: and lots of insurance companies, maybe even most, would go 344 00:20:59,200 --> 00:21:05,000 Speaker 1: out of business. Sampson says the entire insurance industry has 345 00:21:05,080 --> 00:21:08,160 Speaker 1: roughly eight hundred billion dollars in cash to pay any 346 00:21:08,280 --> 00:21:11,120 Speaker 1: and all claims that may arise. But he says industry 347 00:21:11,200 --> 00:21:15,080 Speaker 1: data shows that pandemic related losses for just small companies 348 00:21:15,359 --> 00:21:18,480 Speaker 1: are running at four hundred billion dollars a month. It 349 00:21:18,480 --> 00:21:21,399 Speaker 1: would end up being a solvency event for the industry 350 00:21:21,960 --> 00:21:25,080 Speaker 1: and inhibit the ability of the industry to pay for 351 00:21:25,560 --> 00:21:30,280 Speaker 1: all of the claims that are covered in policies, both 352 00:21:30,280 --> 00:21:33,560 Speaker 1: on commercial policies as well as personal lines policies. It 353 00:21:33,600 --> 00:21:36,760 Speaker 1: would take only a couple of months before all of 354 00:21:36,800 --> 00:21:40,480 Speaker 1: that statutory surplus is exhausted, and then who's going to 355 00:21:40,560 --> 00:21:45,080 Speaker 1: be left to pay planes for uh, you know, tornadoes 356 00:21:45,400 --> 00:21:48,960 Speaker 1: and hurricanement. There's an important point to make here. Some 357 00:21:49,119 --> 00:21:53,480 Speaker 1: insurers did sell policies that covered pandemics. After all, you 358 00:21:53,480 --> 00:21:57,080 Speaker 1: didn't get almost anything insured. Used to be common practice 359 00:21:57,119 --> 00:22:00,159 Speaker 1: for movie stars to ensure their own faces, but the 360 00:22:00,240 --> 00:22:04,840 Speaker 1: question is at what price. Here's an example, you know, Wimbledon, 361 00:22:05,280 --> 00:22:09,800 Speaker 1: that big tennis tournament in England. It's unclear why, but 362 00:22:09,920 --> 00:22:13,200 Speaker 1: ever since the Stars outbreak, the organizers of the tournament 363 00:22:13,280 --> 00:22:18,400 Speaker 1: purchased a business interruption policy that specifically covered pandemics. They 364 00:22:18,400 --> 00:22:20,840 Speaker 1: were covered after this year's tournament had to be canceled, 365 00:22:21,440 --> 00:22:24,000 Speaker 1: but their coverage reportedly came at the cost of nearly 366 00:22:24,080 --> 00:22:28,040 Speaker 1: two million dollars a year every year for almost two 367 00:22:28,040 --> 00:22:34,880 Speaker 1: decades leading up to this year. Rhonda or In, an 368 00:22:34,880 --> 00:22:38,159 Speaker 1: attorney with the firm Anderson Kill who represents policy holders 369 00:22:38,160 --> 00:22:42,040 Speaker 1: and suits against their insurance companies, says, it's irrelevant whether 370 00:22:42,080 --> 00:22:45,000 Speaker 1: a business could have or couldn't have protected itself before 371 00:22:45,040 --> 00:22:49,280 Speaker 1: the pandemic. That's a fundamental misunderstanding of the role insurance 372 00:22:49,359 --> 00:22:52,640 Speaker 1: is supposed to play in society. She says, who steps 373 00:22:52,800 --> 00:22:59,320 Speaker 1: forward in a national crisis of this scale is always 374 00:22:59,760 --> 00:23:05,760 Speaker 1: a capitalist society, a conflict between government and private industry. 375 00:23:05,920 --> 00:23:10,240 Speaker 1: So you have insurance companies that are supposed to step 376 00:23:10,280 --> 00:23:14,520 Speaker 1: forward in a crisis, and it sounds like they're pushing 377 00:23:14,600 --> 00:23:17,440 Speaker 1: back and saying, sorry, this one's too big for us. 378 00:23:18,440 --> 00:23:20,919 Speaker 1: We're gonna step back now. And where this is the 379 00:23:21,040 --> 00:23:25,760 Speaker 1: government's problem. This crisis is too huge for a private 380 00:23:25,800 --> 00:23:28,600 Speaker 1: industry to handle. It has to be handled on the 381 00:23:28,640 --> 00:23:34,720 Speaker 1: government level. That is a deep philosophical conversation, really, And 382 00:23:34,800 --> 00:23:38,359 Speaker 1: she says that would be fine, except the government doesn't 383 00:23:38,400 --> 00:23:42,440 Speaker 1: treat insurance companies like normal companies. For example, they enjoy 384 00:23:42,560 --> 00:23:46,560 Speaker 1: lots of perks from the government, like exemptions from antitrust laws. 385 00:23:46,680 --> 00:23:50,240 Speaker 1: Insurance companies are not supposed to be cutting their lasses 386 00:23:50,760 --> 00:23:54,040 Speaker 1: when there's a crisis. That is the time for them 387 00:23:54,119 --> 00:23:58,800 Speaker 1: to step up and say they're here. It's completely backwards 388 00:23:59,560 --> 00:24:02,640 Speaker 1: for the insurance industry to say, but if we pay, 389 00:24:02,760 --> 00:24:05,679 Speaker 1: these losses will go back for him. Well, I guess 390 00:24:05,680 --> 00:24:08,200 Speaker 1: you didn't do a good risk job with your reserves. 391 00:24:08,280 --> 00:24:13,000 Speaker 1: Then that is your raison debtre that's what you are. 392 00:24:19,440 --> 00:24:23,720 Speaker 1: Congress can and does get involved in regulating insurers, but 393 00:24:23,840 --> 00:24:26,480 Speaker 1: really the lion share of the oversight happens at the 394 00:24:26,520 --> 00:24:31,000 Speaker 1: state level. Mike Krieedler, the top insurance regulator in Washington State, 395 00:24:31,560 --> 00:24:34,280 Speaker 1: says he's not happy with how quickly insures our rejecting 396 00:24:34,280 --> 00:24:37,919 Speaker 1: claims in some cases just hours after they've been filed. 397 00:24:38,080 --> 00:24:42,880 Speaker 1: Became clear that the insurance companies were, in my opinion, 398 00:24:42,920 --> 00:24:47,000 Speaker 1: being somewhat cavalier in their response to their policy holders 399 00:24:47,680 --> 00:24:51,840 Speaker 1: as to whether they had coverage or not. I made 400 00:24:51,840 --> 00:24:53,960 Speaker 1: it very clear. I sent out a notice to all 401 00:24:54,000 --> 00:24:57,159 Speaker 1: of the insurance companies saying, if if you deny a 402 00:24:57,240 --> 00:25:01,680 Speaker 1: claim for business interruption, you would have a legal obligation 403 00:25:01,840 --> 00:25:06,320 Speaker 1: to give a thorough and complete answer as to why 404 00:25:06,400 --> 00:25:09,359 Speaker 1: you're covered or not covered. But while Creeler made bristle 405 00:25:09,440 --> 00:25:12,520 Speaker 1: at how the message is being delivered, he ultimately agrees 406 00:25:12,560 --> 00:25:15,359 Speaker 1: with Samson that this crisis is not something the insurance 407 00:25:15,400 --> 00:25:18,359 Speaker 1: industry can be expected to handle. As a player in 408 00:25:18,400 --> 00:25:21,800 Speaker 1: the public sector. However, Creeler is thinking about what all 409 00:25:21,880 --> 00:25:24,720 Speaker 1: this means. He says it's not tenable to just tell 410 00:25:24,760 --> 00:25:28,840 Speaker 1: businesses they can't get insurance for any future pandemic shutdowns, 411 00:25:28,880 --> 00:25:32,240 Speaker 1: because now we all know how devastating a pandemic can 412 00:25:32,280 --> 00:25:35,360 Speaker 1: be and how it can hit at any time. If 413 00:25:35,400 --> 00:25:39,960 Speaker 1: businesses can't ensure this risk, banks won't lead to them. 414 00:25:40,200 --> 00:25:43,159 Speaker 1: Creeler can already imagine what discussions and boardrooms will be 415 00:25:43,200 --> 00:25:46,719 Speaker 1: like when companies learn they can't ensure pandemic risk. Listen, 416 00:25:47,000 --> 00:25:49,840 Speaker 1: we've got to have some kind of coverage here. You know, 417 00:25:50,160 --> 00:25:53,640 Speaker 1: I can't convince the banks. I can't convince my stockholders 418 00:25:53,680 --> 00:25:57,880 Speaker 1: that this is a prudent activity. Uh. If we've got 419 00:25:57,880 --> 00:26:00,119 Speaker 1: this kind of risk cat hang over our head, So 420 00:26:00,200 --> 00:26:04,160 Speaker 1: you've got to offer me insurance coverage. That's who's going 421 00:26:04,200 --> 00:26:08,360 Speaker 1: to have lead the charge. Then with the Congress. Congress 422 00:26:08,440 --> 00:26:10,800 Speaker 1: is going to feel some hot breath in the back. 423 00:26:10,880 --> 00:26:14,040 Speaker 1: That's GONDO on this one. We talked about this with 424 00:26:14,080 --> 00:26:17,720 Speaker 1: Steve Dennis, the head of the Small Business Finance Association. 425 00:26:18,400 --> 00:26:20,760 Speaker 1: That's a group that represents banks who make loans to 426 00:26:20,840 --> 00:26:24,640 Speaker 1: businesses like these. He was genuinely unsure how things would 427 00:26:24,680 --> 00:26:27,200 Speaker 1: play out in the future if small businesses can't get 428 00:26:27,240 --> 00:26:31,040 Speaker 1: pandemic insurance. He said, many of the lenders he represents 429 00:26:31,080 --> 00:26:33,920 Speaker 1: are struggling already and he doesn't know how they'd be 430 00:26:33,960 --> 00:26:35,760 Speaker 1: able to take on the risk of lending to an 431 00:26:35,840 --> 00:26:41,399 Speaker 1: uninsured business. Ultimately, Dennis says operating a small business needs 432 00:26:41,400 --> 00:26:45,080 Speaker 1: to somehow be made less harrowing. The federal government needs 433 00:26:45,119 --> 00:26:48,800 Speaker 1: to quote send a message to small business owners that 434 00:26:48,880 --> 00:26:52,639 Speaker 1: it's safe to open their doors unquote. That was Bloomberg 435 00:26:52,680 --> 00:26:57,200 Speaker 1: Law Financial Services reporter Evan Weinberger. All right, so we've 436 00:26:57,320 --> 00:27:00,320 Speaker 1: established that the ball is in Congress's court. All those 437 00:27:00,400 --> 00:27:02,679 Speaker 1: lawmakers on Capitol he'll have to do is remake the 438 00:27:02,840 --> 00:27:06,480 Speaker 1: entire property and casualty insurance industry. This is where you 439 00:27:06,520 --> 00:27:10,800 Speaker 1: have an essentially unstoppable force meeting an immovable object, you 440 00:27:10,880 --> 00:27:14,520 Speaker 1: have insured saying pandemics are essentially unensurable events because they 441 00:27:14,600 --> 00:27:17,040 Speaker 1: hit everyone all at once, and you have business owners 442 00:27:17,080 --> 00:27:19,600 Speaker 1: saying we can't function without insuring the risk of a 443 00:27:19,600 --> 00:27:23,439 Speaker 1: future pandemic. Bloomberg taxes. David Hood talked to lawmakers on 444 00:27:23,520 --> 00:27:26,120 Speaker 1: both sides of the aisle about this and found few 445 00:27:26,160 --> 00:27:28,920 Speaker 1: signs that they're anywhere close. Believe it or not, there 446 00:27:28,920 --> 00:27:31,959 Speaker 1: actually is precedent for Congress stepping in and forcing the 447 00:27:31,960 --> 00:27:35,920 Speaker 1: insurance industry to cover something it wasn't or just creating 448 00:27:35,920 --> 00:27:39,320 Speaker 1: a whole new insurance product out of whole cloth. That's 449 00:27:39,359 --> 00:27:42,040 Speaker 1: basically what happened in the late nineties sixties with the 450 00:27:42,080 --> 00:27:45,320 Speaker 1: creation of the National Flood Insurance Program and if I P. 451 00:27:46,000 --> 00:27:48,400 Speaker 1: Congress got tired of stepping in and footing the bill 452 00:27:48,440 --> 00:27:53,040 Speaker 1: to rebuild communities after floods, but no private company would 453 00:27:53,080 --> 00:27:56,440 Speaker 1: offer flood insurance. It was that whole correlated risk thing. 454 00:27:56,680 --> 00:28:01,000 Speaker 1: Remember what Professor Schwartz said earlier, if when they can 455 00:28:01,720 --> 00:28:04,880 Speaker 1: ensure risks that are not correlated with one another, So 456 00:28:05,359 --> 00:28:09,520 Speaker 1: now apply that to floods. In Hurricane Betsy, caused an 457 00:28:09,520 --> 00:28:13,520 Speaker 1: inflation adjusted eleven and a half billion in damages. That 458 00:28:13,600 --> 00:28:16,679 Speaker 1: was the final straw the eye of the hurricane crosses 459 00:28:16,760 --> 00:28:20,600 Speaker 1: key logo heading west. So what Congress did with the 460 00:28:20,680 --> 00:28:23,719 Speaker 1: n f I P was basically just create its own 461 00:28:23,760 --> 00:28:27,800 Speaker 1: insurance company. Now, through this program, private companies can sell 462 00:28:27,840 --> 00:28:30,480 Speaker 1: you a flood policy, but all the premiums go to 463 00:28:30,520 --> 00:28:33,119 Speaker 1: the federal government and all the claims are paid by 464 00:28:33,200 --> 00:28:37,320 Speaker 1: Uncle Sam. So that's one possible model, but that might 465 00:28:37,359 --> 00:28:40,640 Speaker 1: not be the best model for Congress. According to Vicky Schmidt, 466 00:28:41,000 --> 00:28:43,520 Speaker 1: she's the top insurance regulator in the state of Kansas. 467 00:28:43,600 --> 00:28:46,720 Speaker 1: There are some compelling arguments that probably could and should 468 00:28:46,760 --> 00:28:49,280 Speaker 1: be made that it's not the most well run program, 469 00:28:49,600 --> 00:28:54,040 Speaker 1: and it's expensive and it can be abused. Vicky's midwesternness 470 00:28:54,080 --> 00:28:56,640 Speaker 1: is showing. What she's too polite to say is that 471 00:28:56,720 --> 00:28:59,120 Speaker 1: the n f I P is in deep trouble. Because 472 00:28:59,160 --> 00:29:02,000 Speaker 1: it's run by the FRONMNT, there's been a strong incentive 473 00:29:02,040 --> 00:29:04,720 Speaker 1: to keep premiums lower than they should be to avoid 474 00:29:04,800 --> 00:29:08,040 Speaker 1: angering voters in coastal states. As a result of this 475 00:29:08,280 --> 00:29:11,480 Speaker 1: and the results of you guessed it, climate change, the 476 00:29:11,600 --> 00:29:14,479 Speaker 1: n f I PEOPLE is operating an enormous deficit year 477 00:29:14,520 --> 00:29:18,440 Speaker 1: after a year seventeen study from the Congressional Budget Office 478 00:29:18,480 --> 00:29:21,480 Speaker 1: found that in an average year, the program pays out 479 00:29:21,520 --> 00:29:24,720 Speaker 1: around one point four billion dollars more than it brings 480 00:29:24,720 --> 00:29:29,000 Speaker 1: in from premiums, which means taxpayers are subsidizing this insurance 481 00:29:29,040 --> 00:29:31,880 Speaker 1: program to the tune of around one point four billion 482 00:29:31,920 --> 00:29:35,480 Speaker 1: dollars a year. Before we're well above working. Of course, 483 00:29:35,800 --> 00:29:39,160 Speaker 1: it had to be in the range. So even though 484 00:29:39,200 --> 00:29:43,640 Speaker 1: floods happen more frequently than global pandemics, maybe federally run 485 00:29:43,640 --> 00:29:46,520 Speaker 1: and pandemic insurance isn't the way to go. There's another 486 00:29:46,560 --> 00:29:49,840 Speaker 1: option Congress can consider. In fact, they already did it 487 00:29:49,920 --> 00:29:53,000 Speaker 1: once after the terrorist attacks of September eleven, and we 488 00:29:53,080 --> 00:29:56,880 Speaker 1: have unconfirmed reports this morning that a plane has crashed 489 00:29:56,880 --> 00:30:00,520 Speaker 1: into one of the towers. Back then, this is were 490 00:30:00,520 --> 00:30:03,480 Speaker 1: in a similar situation to where they are now. They 491 00:30:03,520 --> 00:30:05,880 Speaker 1: needed to be able to ensure the risk of another 492 00:30:06,000 --> 00:30:09,800 Speaker 1: terrorist attack happening, but the insurance industry felt they couldn't 493 00:30:09,800 --> 00:30:13,360 Speaker 1: handle that. Mike Creedler, the insurance Commissioner of Washington State, 494 00:30:13,480 --> 00:30:16,720 Speaker 1: remembers it, well, the losses could have been really quite 495 00:30:16,800 --> 00:30:23,200 Speaker 1: unprecedented depending on the Terrorism Act, and getting insurance companies 496 00:30:23,240 --> 00:30:27,440 Speaker 1: to build that into their into their policies, they found 497 00:30:27,480 --> 00:30:32,400 Speaker 1: extremely difficult to do. Um and in order to make 498 00:30:32,440 --> 00:30:37,000 Speaker 1: sure that you were having adequate coverage for all kinds 499 00:30:37,000 --> 00:30:42,480 Speaker 1: of losses, including acts of terrorism. Um, the federal government 500 00:30:42,600 --> 00:30:45,520 Speaker 1: stepped in. What they did was create the Terrorism Risk 501 00:30:45,560 --> 00:30:50,360 Speaker 1: Insurance Program. Instead of essentially having the federal government issue policies, 502 00:30:50,480 --> 00:30:53,440 Speaker 1: what Congress did was tell private insurans, hey, you need 503 00:30:53,480 --> 00:30:56,600 Speaker 1: to issue policies that cover terrorism, but if a terrorist 504 00:30:56,600 --> 00:31:00,680 Speaker 1: attack actually happens and your claims exceed a certain mount 505 00:31:00,680 --> 00:31:03,719 Speaker 1: we the U S taxpayers will cover the rest. In 506 00:31:03,760 --> 00:31:07,200 Speaker 1: this way, the federal government essentially became what's known as 507 00:31:07,240 --> 00:31:11,160 Speaker 1: a reinsurer, an insurance company that covers other insurance companies. 508 00:31:11,360 --> 00:31:13,719 Speaker 1: It's kind of like the insurance industry version of that 509 00:31:13,760 --> 00:31:18,520 Speaker 1: movie Inception very meta. This can't be done. Dreams within 510 00:31:18,640 --> 00:31:27,200 Speaker 1: dreams is too unstated. It is possible, so this seems 511 00:31:27,240 --> 00:31:30,640 Speaker 1: like a viable option. Tell ensures they have to cover pandemics, 512 00:31:30,640 --> 00:31:33,360 Speaker 1: but let them know that John and Jane taxpayer will 513 00:31:33,360 --> 00:31:36,040 Speaker 1: have their backs if the amount of claims gets too big. 514 00:31:37,080 --> 00:31:39,960 Speaker 1: And actually this is exactly what some lawmakers want to do. 515 00:31:40,480 --> 00:31:43,400 Speaker 1: Carolyn Maloney, a senior Democrat from New York who sits 516 00:31:43,440 --> 00:31:46,560 Speaker 1: on the House Financial Services Committee, introduced to bill in 517 00:31:46,680 --> 00:31:49,280 Speaker 1: May that would create something like the Terrorism and Risk 518 00:31:49,320 --> 00:31:53,080 Speaker 1: Insurance Program, but for pandemics. After the terrorist attack on 519 00:31:53,200 --> 00:31:57,240 Speaker 1: nine eleven, the economy and New York completely shut down. 520 00:31:57,760 --> 00:32:00,280 Speaker 1: I can tell you you could not even insure a 521 00:32:00,360 --> 00:32:05,920 Speaker 1: hot dog stand. We couldn't build anything. Everything stopped because 522 00:32:05,960 --> 00:32:10,760 Speaker 1: insurance companies would not ensure any property against terrorist attacks. 523 00:32:11,080 --> 00:32:14,960 Speaker 1: But Congress recognized that if companies couldn't get terrorism insurance, 524 00:32:15,240 --> 00:32:18,360 Speaker 1: then there would be no more construction and millions of 525 00:32:18,440 --> 00:32:21,000 Speaker 1: jobs would be lost. But even this might not be 526 00:32:21,120 --> 00:32:25,320 Speaker 1: palatable for someone capital Hill. Blaine Lucameyer, a Missouri Republican 527 00:32:25,360 --> 00:32:28,360 Speaker 1: who also sits on the House Financial Services Committee, says 528 00:32:28,680 --> 00:32:31,840 Speaker 1: without some kind of backstop, Maloney's bill could lead to 529 00:32:31,880 --> 00:32:34,920 Speaker 1: the government spending a nearly infinite amount of money if 530 00:32:34,960 --> 00:32:40,520 Speaker 1: another pandemic hits the program that she's outlined. Quite frankly, Uh, 531 00:32:40,640 --> 00:32:42,800 Speaker 1: and my mind has got a lot of problems with it. 532 00:32:42,920 --> 00:32:46,680 Speaker 1: And I just really don't see that it's um it's 533 00:32:46,720 --> 00:32:50,080 Speaker 1: got much of a chance of working. Uh, It's just 534 00:32:50,200 --> 00:32:54,080 Speaker 1: not something I think can actually happen. It's poorly structured 535 00:32:54,120 --> 00:32:57,880 Speaker 1: and costs her you know, holy account. Or do we 536 00:32:57,920 --> 00:32:59,840 Speaker 1: really have a backstop or do we not have a backstop. 537 00:33:00,080 --> 00:33:02,440 Speaker 1: This thing with the Luke Myer is ultimately of the 538 00:33:02,480 --> 00:33:05,520 Speaker 1: school of thought that a pandemic is an unensurable event 539 00:33:05,920 --> 00:33:08,040 Speaker 1: and the only way to respond to it is to 540 00:33:08,120 --> 00:33:11,760 Speaker 1: do exactly what Congress is already doing right now. Number One, 541 00:33:11,840 --> 00:33:14,960 Speaker 1: is it's something we can actually fix and prepare for, 542 00:33:15,440 --> 00:33:17,920 Speaker 1: because this is a once in a hundred year event, apparently, 543 00:33:18,120 --> 00:33:21,440 Speaker 1: is you know, this seems to be the magnitude of 544 00:33:21,480 --> 00:33:25,960 Speaker 1: this pandemic, seems to be comfortable to nothing until other 545 00:33:26,040 --> 00:33:29,320 Speaker 1: than one back in the early ninet you know, So 546 00:33:29,360 --> 00:33:31,880 Speaker 1: how do you prepare for something, you know, just even 547 00:33:31,920 --> 00:33:35,760 Speaker 1: fifty years in the future, you know, is it something 548 00:33:35,800 --> 00:33:38,880 Speaker 1: that we're maybe better off just left to responding to 549 00:33:39,040 --> 00:33:41,080 Speaker 1: at that moment and just do like we're doing now, 550 00:33:41,240 --> 00:33:44,000 Speaker 1: just come up with a solution to fix that problem 551 00:33:44,040 --> 00:33:48,080 Speaker 1: at that point in time, Uh, so that we can 552 00:33:48,120 --> 00:33:52,280 Speaker 1: continue to exist and get our company, our company's and 553 00:33:52,480 --> 00:33:55,000 Speaker 1: nan backup in business, you get employees back to work, 554 00:33:55,000 --> 00:33:57,160 Speaker 1: and get our country up and on again. Of course, 555 00:33:57,280 --> 00:34:00,080 Speaker 1: this means that all the businesses that we're relying on 556 00:34:00,120 --> 00:34:02,719 Speaker 1: their insurance policies to save them in a situation like 557 00:34:02,760 --> 00:34:07,120 Speaker 1: the coronavirus, well, unless the government directly bails them out. 558 00:34:07,720 --> 00:34:11,839 Speaker 1: That's it for them. There is another solution, one not 559 00:34:12,000 --> 00:34:15,720 Speaker 1: quite as fatalistic as Luca Myer's. It would involve simply 560 00:34:15,760 --> 00:34:18,680 Speaker 1: passing a law requiring insurance companies to pay out all 561 00:34:18,719 --> 00:34:22,560 Speaker 1: the business interruption claims, both the ones already filed and 562 00:34:22,680 --> 00:34:25,640 Speaker 1: ones that will be filed in the future. In other words, 563 00:34:25,920 --> 00:34:29,960 Speaker 1: lawmakers retroactively go back and essentially take all those virus 564 00:34:30,000 --> 00:34:32,680 Speaker 1: exclusions that were tucked into all the business and interruption 565 00:34:32,760 --> 00:34:39,920 Speaker 1: policies and basically obliterate them, putting aside the dubious legality 566 00:34:39,920 --> 00:34:44,520 Speaker 1: of lawmakers just rewriting existing contracts. Doing this would be extreme, 567 00:34:45,040 --> 00:34:48,279 Speaker 1: so extreme that few, if anyone, in Congress is even 568 00:34:48,320 --> 00:34:50,920 Speaker 1: talking about it. But if you travel north a few 569 00:34:50,960 --> 00:34:54,239 Speaker 1: hundred miles to Albany, New York, Robert Carroll will be 570 00:34:54,280 --> 00:34:56,879 Speaker 1: glad to chat with you. He's a state legislator from 571 00:34:56,880 --> 00:34:59,200 Speaker 1: New York City who has a bill that would mandate 572 00:34:59,320 --> 00:35:03,560 Speaker 1: retroactive payment of post pandemic business interruption claims. These small 573 00:35:03,600 --> 00:35:07,040 Speaker 1: businesses of zero bargaining power. A broker comes to them 574 00:35:07,520 --> 00:35:11,400 Speaker 1: says you should have this insurance. Sometimes the state, and 575 00:35:11,440 --> 00:35:15,400 Speaker 1: in New York, the state requires certain small businesses to 576 00:35:15,520 --> 00:35:20,880 Speaker 1: carry certain um casualty and liability insurance which sometimes business 577 00:35:20,920 --> 00:35:25,680 Speaker 1: interruption and baked into UM and they pick it out 578 00:35:25,840 --> 00:35:30,160 Speaker 1: the way you picked the between a Verizon an a 579 00:35:30,239 --> 00:35:33,480 Speaker 1: T and T cell phone contract, or the difference between 580 00:35:33,840 --> 00:35:38,680 Speaker 1: a Bank of America and Wells Fargo mortgage. UM. You 581 00:35:38,680 --> 00:35:43,319 Speaker 1: know you are not negotiating the terms of those contracts. 582 00:35:43,600 --> 00:35:46,279 Speaker 1: Carol says, in a way, his bill would prevent the 583 00:35:46,320 --> 00:35:50,720 Speaker 1: insurance industry from successfully outsmarting its clients. You were smarter, 584 00:35:50,920 --> 00:35:55,839 Speaker 1: more sophisticated than every small business in America. Kudos to you, 585 00:35:56,800 --> 00:36:01,760 Speaker 1: but no, we're not gonna let you sit on possibly 586 00:36:01,800 --> 00:36:05,799 Speaker 1: as much as one point four trillion dollars of reserves, 587 00:36:07,480 --> 00:36:11,880 Speaker 1: pay out your executives million dollar bonuses at the end 588 00:36:11,920 --> 00:36:18,000 Speaker 1: of this year, and see economic devastation ripple part our 589 00:36:18,120 --> 00:36:22,600 Speaker 1: small businesses, especially in our big expensive cities. Carol's bill 590 00:36:22,680 --> 00:36:26,200 Speaker 1: is showing no signs of momentum in Albany. Other similar 591 00:36:26,239 --> 00:36:29,200 Speaker 1: bills than other state legislatures are suffering the same fate. 592 00:36:29,480 --> 00:36:32,799 Speaker 1: But despite that, the insurance industry seems to feel the 593 00:36:32,800 --> 00:36:37,000 Speaker 1: threat of this retroactive approach. In earnings calls earlier this year, 594 00:36:37,360 --> 00:36:42,719 Speaker 1: several industry executives said they will fight legislation forcing retroactive payouts. 595 00:36:43,160 --> 00:36:46,720 Speaker 1: Christopher Swift, the CEO of the Hartford Financial Services Groups, 596 00:36:47,000 --> 00:36:50,880 Speaker 1: frame this debate in existential terms. Any effort to retroactively 597 00:36:50,920 --> 00:36:56,440 Speaker 1: rewrite these contracts presume coverage where we remove exclusions with 598 00:36:56,560 --> 00:36:59,960 Speaker 1: threaten the very foundation of the insurance industry. The same 599 00:37:00,080 --> 00:37:03,880 Speaker 1: to city of contracts under our constitution and the principles 600 00:37:03,880 --> 00:37:06,640 Speaker 1: of a free market economy. And finally, what does the 601 00:37:06,680 --> 00:37:10,799 Speaker 1: insurance industry itself want to do well? Its plan would 602 00:37:10,800 --> 00:37:14,160 Speaker 1: basically take the insurance industry out of the equation altogether. 603 00:37:14,440 --> 00:37:17,439 Speaker 1: The industry's proposal would create kind of a piggy bank 604 00:37:17,480 --> 00:37:20,560 Speaker 1: at the Treasury Department that businesses would gradually pay into. 605 00:37:20,880 --> 00:37:24,680 Speaker 1: If another pandemic hits, or if COVID nineteen causes another 606 00:37:24,719 --> 00:37:28,680 Speaker 1: federal emergency order, those companies could make withdrawals to cover 607 00:37:28,800 --> 00:37:32,200 Speaker 1: lost revenue in payroll. If there's not enough funds, the 608 00:37:32,280 --> 00:37:34,880 Speaker 1: government would cover the rest. And so the whole idea 609 00:37:35,520 --> 00:37:40,239 Speaker 1: behind our proposal is, let's learn the lessons from what 610 00:37:40,320 --> 00:37:44,239 Speaker 1: we're going through right now and design a more systemic, 611 00:37:44,800 --> 00:37:49,960 Speaker 1: predictable approach. God forbid that we have future outbreaks of 612 00:37:50,080 --> 00:37:55,040 Speaker 1: COVID nineteen or other pandemics. That's David Sampson, the insurance 613 00:37:55,080 --> 00:37:58,719 Speaker 1: industry head who you've heard from earlier. He also said 614 00:37:58,760 --> 00:38:01,640 Speaker 1: the new Treasury fund would be more effective than insurance. 615 00:38:02,080 --> 00:38:08,279 Speaker 1: No claims, no forensic investigations into companies, books, no advanced documentation, automatic, 616 00:38:08,360 --> 00:38:11,560 Speaker 1: fast and easy for everyone. But it doesn't seem like 617 00:38:11,600 --> 00:38:14,840 Speaker 1: this is getting much traction on Capitol Hill. Powerful on 618 00:38:14,960 --> 00:38:17,760 Speaker 1: makers like Maloney's say this wouldn't deal with the problems 619 00:38:17,800 --> 00:38:20,920 Speaker 1: companies are facing now and that insures should play a 620 00:38:21,000 --> 00:38:26,160 Speaker 1: more active role. That was Bloomberg Law tax reporter David Hood. 621 00:38:26,440 --> 00:38:29,320 Speaker 1: And that's what the debate over the future of insurance 622 00:38:29,320 --> 00:38:32,240 Speaker 1: will look like in the coming weeks, months, and most 623 00:38:32,239 --> 00:38:35,440 Speaker 1: likely years. But what about the people who aren't so 624 00:38:35,520 --> 00:38:38,040 Speaker 1: much worried about the future, but are worried about the present, 625 00:38:38,160 --> 00:38:40,520 Speaker 1: The business owners who just need money to stay in business. 626 00:38:41,000 --> 00:38:43,879 Speaker 1: Is there any hope for them? Well, since we talked 627 00:38:43,880 --> 00:38:46,600 Speaker 1: with them earlier this year, Bonnie, the theater owner in Tucson, 628 00:38:47,040 --> 00:38:50,160 Speaker 1: is still presiding over a totally closed theater. She told 629 00:38:50,239 --> 00:38:52,160 Speaker 1: us she expects the Fox to be closed through the 630 00:38:52,200 --> 00:38:54,879 Speaker 1: first quarter of next year, and said it's future will 631 00:38:54,880 --> 00:38:58,200 Speaker 1: depend on some mix of philanthropy and new federal performing 632 00:38:58,320 --> 00:39:02,000 Speaker 1: arts subsidies. By Be, the restaurant ur in Colorado, has 633 00:39:02,040 --> 00:39:05,359 Speaker 1: had all of his insurance claims denied. He's suing, isn't sure, 634 00:39:05,680 --> 00:39:09,240 Speaker 1: but doesn't have a court date until next summer. And Julia, 635 00:39:09,320 --> 00:39:11,960 Speaker 1: the cafe owner in Santa Barbara, also hasn't collected on 636 00:39:12,000 --> 00:39:14,960 Speaker 1: her business interruption claims, but she says she's still watching 637 00:39:14,960 --> 00:39:18,319 Speaker 1: for new quarantine orders from California Governor Gavin Newsom. She 638 00:39:18,400 --> 00:39:20,960 Speaker 1: says depending on the exact wording of a future order 639 00:39:21,040 --> 00:39:24,960 Speaker 1: from Newsome, her insurance policy may finally kick in. Her 640 00:39:25,000 --> 00:39:27,400 Speaker 1: cafe is still in business, but just for delivery and 641 00:39:27,480 --> 00:39:30,560 Speaker 1: pick up with the rent sky high. She's not sure 642 00:39:30,600 --> 00:39:33,240 Speaker 1: how much longer she can stay in business, but Julia 643 00:39:33,320 --> 00:39:36,359 Speaker 1: told us we're still here and we're still hanging on. 644 00:39:46,080 --> 00:39:49,440 Speaker 1: Business Interrupted was produced by myself, David Schultz, along with 645 00:39:49,560 --> 00:39:53,279 Speaker 1: Lydia Bayoud, Evan Meineberger, and David Hood. Additional help came 646 00:39:53,280 --> 00:39:56,800 Speaker 1: from Andrew Sadder. Our editors were Josh Block and Adam Allington, 647 00:39:56,960 --> 00:40:00,000 Speaker 1: and Josh Block is our executive producer. If you love 648 00:40:00,080 --> 00:40:02,680 Speaker 1: Business Interrupted or even just liked it, please share it 649 00:40:02,719 --> 00:40:05,400 Speaker 1: on social media, and also check out our extensive coverage 650 00:40:05,400 --> 00:40:07,840 Speaker 1: of the insurance industry and lots of other legal issues 651 00:40:08,080 --> 00:40:11,319 Speaker 1: at Bloomberg Law dot com. And if you like podcasts, 652 00:40:11,320 --> 00:40:13,399 Speaker 1: and if you've made it this far, I'm sure you do, 653 00:40:13,880 --> 00:40:16,360 Speaker 1: check out our suite of podcasts. We've got weekly shows 654 00:40:16,400 --> 00:40:18,960 Speaker 1: on everything from the environment to the Supreme Court. You 655 00:40:18,960 --> 00:40:21,480 Speaker 1: can find them at news dot Bloomberg Law dot com, 656 00:40:21,520 --> 00:40:26,560 Speaker 1: slash podcasts. That's news dot Bloomberg Law dot com slash podcasts. 657 00:40:26,920 --> 00:40:37,080 Speaker 1: Thank you so much for listening. That was David Schultz 658 00:40:37,239 --> 00:40:40,240 Speaker 1: from Bloomberg Law and that's it for our show today. 659 00:40:40,719 --> 00:40:43,440 Speaker 1: For coverage of the outbreak from one and twenty bureaus 660 00:40:43,480 --> 00:40:48,839 Speaker 1: around the world, visit Bloomberg dot com slash coronavirus and 661 00:40:48,920 --> 00:40:51,200 Speaker 1: if you like the show, please leave us a review 662 00:40:51,239 --> 00:40:54,799 Speaker 1: and a rating on Apple Podcasts or Spotify. It's the 663 00:40:54,840 --> 00:40:57,920 Speaker 1: best way to help more listeners find our global reporting. 664 00:40:58,600 --> 00:41:03,080 Speaker 1: The Prognosis Daily Edition is produced by Tophor Forhes, Jordan Gospoure, 665 00:41:03,440 --> 00:41:07,759 Speaker 1: Magnus hen Rickson and me Laura Carlson. Original music by 666 00:41:07,880 --> 00:41:11,399 Speaker 1: Leo Sidran. Our editors are Rick Shine and Francesca Levi. 667 00:41:11,960 --> 00:41:16,400 Speaker 1: Francesca Levi is Bloomberg's head of podcasts. Thanks for listening.