How do you remain resilient against a wave of COVID-19 claims?

By Andrew Gordon

EY Global Forensic & Integrity Services Leader

Global Forensics Leader focusing on helping organizations build their integrity agenda so they better anticipate and mitigate risk.

4 minute read 29 Sep 2022
Related topics COVID-19 Law Forensics Insurance

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COVID-19 is likely to drive a surge in disputes and contested claims. Companies that take proactive action now can mitigate their impact.

This article is part of a series about COVID-19 enterprise resilience.

In the confusion and unpredictability that characterizes the economic impact of COVID-19, one outcome is certain: there will be a wave of disputes. This will take many forms including: contested business interruption and event cancellation disputes and claims; contractual disputes, particularly within supply chains; M&A disputes; and class actions from both employees and consumers. Insurance companies and corporates are already preparing for conflicts over whether business interruption and other policies, such as credit insurance, cover pandemic risk.

The risk and impact that follow are likely to be significant – Lloyd’s of London has estimated a US$203bn total projected loss to the insurance industry alone due to COVID-19. Practical steps taken now can protect organizational value for the future.

COVID-19 impact


Total projected loss to the insurance industry due to COVID-19. (Source: Lloyd’s of London, May 2020.)

Adapting operations

History shows that economic downturns typically lead to increased litigation, and we are expecting a global recession as a result of COVID-19. Inevitably there will be an increase in contested insurance claims, disputes between customers and suppliers, and opportunistic behavior. So, when the surge arrives, “who will pay” – and how can businesses prepare for the fallout?

One of the biggest challenges of adapting to this disruption will be first understanding how it will play out. Many businesses will struggle to model the pandemic’s impact on the business and develop an appropriate response. It can also be difficult to identify quickly what insurance cover may be contested and develop strategies to minimize the associated financial exposure. Organizations will need to proactively minimize the risk of being sued by suppliers, customers or employees or sanctioned and fined by a regulator.

Three key actions can help to overcome these challenges:

  1. Apply technology and leading-edge modeling techniques to develop a multidimensional view of the potential impact of the pandemic. Modeling different “what if” scenarios can give companies an idea of how the outbreak and economic recovery will evolve and help them prepare for the implications on operations.
  2. Accelerate the collection and analysis of exposure-related data and documentation using advanced technology and an appropriate diagnostic framework. This can then be used to inform scenario planning of claims and litigation exposure and to develop potential mitigation strategies.
  3. Develop plans based on the modeling and scenarios, and communicate these effectively to internal and external stakeholders, including regulators. It is important that industry regulators get the full picture of insurers’ true exposure, as well as how they are planning to respond. This helps manage solvency risks and ensure customers are treated fairly. 

Building resilience

As we emerge from the first phase of the pandemic, an expected saw-shaped economic recovery will create ongoing uncertainty and the need to adapt fast to changing conditions. Companies and their insurers will be challenged to strengthen resilience while reframing their organizations to be fit for purpose.

One challenge of the recovery phase will be balancing the need to resolve business critical disputes in a way that maximizes financial recovery or minimizes financial exposure – depending on the perspective – while preserving the enterprise’s reputation and safeguarding long-term commercial relationships.

With the impact of this pandemic unprecedented in the modern era of business, few, if any, organizations will have the inhouse experience and capabilities needed to navigate their complexities. Many companies will have to assemble specialist teams to access the necessary expertise. There is also huge complexity given the diverse range of impacts of COVID-19, which means the sheer volume of data and information to be considered may overwhelm some companies. Technology can help here, but only if deployed by skilled talent.

Three action points can help organizations build resilience:

  1. Develop a well-documented model of potential outcomes and responses, drawing on the expertise across a range of disciplines.
  2. Identify and prioritize what key future commercial relationships will look like. Supply chains will change, and how aggressively companies pursue legal claims may depend on whether commercial relationships are likely to continue.
  3. Use insights and learnings to redesign processes and governance on commercial risks. This will be particularly important as governments and regulators will want to know how business models have been strengthened.

Businesses can take steps to mitigate the impact of claims created by the disruption of COVID-19. Embracing data and technologies to model outcomes, drawing upon specialist expertise and learning lessons from the crisis can help companies adapt operations in the shorter term while building for whatever lies ahead. 

Lead through the COVID-19 crisis

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EY has a global network to lead you through COVID-19 and beyond. We’ll help protect your business from the financial and reputational impact of claims and disputes so you can recover with confidence.




The likelihood of COVID-19 related claims is high. The risk and impact of these will be significant and diverse, but there are practical steps that can be taken now to protect organizational value for the future.

About this article

By Andrew Gordon

EY Global Forensic & Integrity Services Leader

Global Forensics Leader focusing on helping organizations build their integrity agenda so they better anticipate and mitigate risk.

Related topics COVID-19 Law Forensics Insurance