The Insurance Council of New Zealand (ICNZ) has rejected a suggestion that the government underwrite insurance for business interruption losses caused by the coronavirus outbreak.

Minor political party Sustainable New Zealand has argued that one of the simplest and most effective measures available to the Government to support business during the global pandemic would be to underwrite business interruption insurance.

Vernon Tava, the leader of the party which focuses on water, native species and sustainable economic growth, says New Zealand “can’t be green if we’re in the red”.

Most business interruption cover is triggered by material damage to property.

ICNZ CEO Tim Grafton told insuranceNEWS.com.au the Government should continue to provide direct financial assistance to sectors that have suffered losses due to COVID-19, as well as other measures which are under consideration to stimulate the economy and combat recession.

That would be “more appropriate than becoming an insurer of businesses in an area that risk specialists like insurers won’t take on,” Mr Grafton said.