Businesses around the world, hamstrung by lockdowns, are facing often-existential showdowns with insurance companies that are reluctant to pay out on business interruption policy claims for a disaster unknown in living memory.

The insurers say many such policies exclude pandemics, require physical damage on premises or do not apply to the widespread lockdowns seen globally. Facing pressure from regulators, mounting reputational damage and a wave of lawsuits, they warn that paying out could sink their industry.

In some countries, including South Africa, France and Germany, insurers are now opening their chequebooks. But for many customers, these settlements or ex-gratia payments – voluntary payouts that do not imply legal liability – fall short.