The insurance industry set itself up for a public relations disaster when it comes to business interruption claims, and it should be prepared to be called out more often on the name given to the coverage, says one risk researcher.

Calling it “business interruption” when the product wouldn’t actually cover some business interruption events was a mistake, said Robert Muir-Wood, chief research officer at risk modelling and insights firm RMS.

“In retrospect, it was not smart PR for insurers to provide a product called ‘business interruption,’ but with a clause in the small print explaining why it would not pay out in a pandemic.”

In most instances, business interruption is more likely to occur because of a natural catastrophe, not a pandemic.

“The coverage should have been clearly labelled ‘Fire and NatCat BI,” he said during RMS’s conference Exceedance 2020.