Bad news for Irish pubs as UK watchdog stays clear of Covid-19 insurance payments row

The UK financial watchdog FCA has declined to intervene in the dispute over insurers not paying out business interruption claims relating to the Covid-19 pandemic.

This could spell bad news for closed Irish pubs and restaurants, who have already criticised insurers for not paying out similar claims on this side of the Irish sea.

Both the Vintners’’ Federation of Ireland and the Restaurant Association of Ireland previously hit out at insurers and have called for the government to intervene.

However, it is the insurance industry’’s opinion that most business interruption insurance policies do not cover a pandemic, a belief which was echoed by the UK’’s Financial Conduct Authority (FCA).

In a letter, interim chief executive of the FCA Christopher Woolard, said that "based on our conversations with the industry to date, our estimate is that most policies have basic cover, do not cover pandemics and therefore would have no obligation to pay out in relation to the Covid-19 pandemic".

He said: "While this may be disappointing for the policyholder we see no reasonable grounds to intervene in such circumstances. In contrast, there are policies where it is clear that the firm has an obligation to pay out on a policy. For these policies, it is important that claims are assessed and settled quickly."

However, both the Alliance for Insurance Reform here and the Vintners’’ Federation of Ireland have called for Irish insurers to "play their part" in the coronavirus crisis.

The Alliance for Insurance Reform has called on insurers to share the financial burden of the crisis.

"The Alliance has reviewed numerous Irish business interruption clauses in insurance policies over the last two weeks and what is abundantly clear is that some policies cover the current crisis, some do not and some are not clear as to whether they do or not.

"We call on insurers to take their share of the load in acknowledging policies which carry a business interruption liability and paying on those policies as a matter of urgency," it said. The Vintners’’ Federation of Ireland said the Minister for Finance needs to intervene.

"We are urging the Minister to impress upon insurance companies the absolute need to treat customers fairly and to recognise that where publicans make business interruption claims they should be covered," it said.