Insurers don’t have enough resources to cover business interruption losses in a disaster as comprehensive as the one posed by widespread small business closures from the COVID-19 pandemic, a group of insurance industry associations told two members of California’s congressional delegation.

“Insurance coverage works by spreading risk, but that model simply cannot account for a situation in which losses are catastrophic and nearly universal. Standard business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19, and as such, were not actuarially priced to do so,” the groups wrote.

“It is worth noting that recent estimates show that business continuity losses just for small businesses of 100 employees or fewer could amount to between $220 billion to $383 billion per month. Meanwhile, the total surplus for all of the U.S. home, auto, and business insurers combined to pay all future losses is only $800 billion,” the groups said in a letter dated April 2.

“Our organizations stand ready to work with Congress on solutions that provide the necessary relief as soon as possible,” their letter also said. “The loan programs instituted by the CARES Act provide a down payment on economic support for Main Street businesses, but additional liquidity will be required for impaired industries and businesses to avoid an unprecedented systemic, economic crisis.”

CARES is the acronym for the rescue package Congress enacted March 27.