Coronavirus: Row over 'business interruption insurance' takes new turn

The dispute over business interruption insurance claims during the Covid-19 pandemic has flared again, despite the Minister for Finance Paschal Donohoe having warned about the potential "reputational damage" to the industry.
Coronavirus: Row over 'business interruption insurance' takes new turn

The dispute over business interruption insurance claims during the Covid-19 pandemic has flared again, despite the Minister for Finance Paschal Donohoe having warned about the potential "reputational damage" to the industry.

The insurance industry’s stance has been that most policies do not cover a global pandemic such as Covid-19.

However, Peter Boland of the Alliance for Insurance Reform said there has never been a dispute that the majority of policies do not provide this type of cover.

Mr Boland said there were are a "substantial minority" of policies from a number of insurers which do provide cover in this instance, and these are not being dealt with in a timely manner.

"Axa has already conceded [cover] on one of their policies covering over 4,000 shops, office and surgery policyholders," Mr Boland said.

We have seen five policies so far, from various insurers and covering thousands of policyholders, that clearly cover damage inflicted by the pandemic. Included in this group are many publicans.

The policies seen by the Irish Examiner state the insurer will cover financial losses resulting from an interruption to a business under certain circumstances.

These circumstances include restrictions or closures imposed by a "public", "local" or "government authority", due to "an occurrence of a notifiable human disease", or in another policy, an "occurrence of any human infectious or human contagious disease, an outbreak of which must be notified to the local authority."

One policy stipulates outbreaks of contagious or infectious diseases must occur on the premises or within 25 miles of the premises.

Another policy also has a "prevention of access" clause, which the Alliance for Insurance Reform believes could provide cover for a business interruption claim during a pandemic.

Mr Boland said with the exception of Axa, none of Ireland’’s insurers have conceded liability on business interruption insurance. Minister Donohoe had also said some companies had adopted a "blanket rejection" approach and were not "treating customers fairly".

"If this drags out for much longer, it will become an academic exercise, because those businesses who are relying on business interruption insurance claims will be forced to close," Mr Boland said.

"On the issue of business interruption insurance, insurers understand that this is a cause of concern in the marketplace. This is a complex issue, no insurance market in the world provides widespread insurance coverage for pandemics and Ireland is no exception," Insurance Ireland said.

However, insurers are very mindful of their commitments to the customer and will adjudicate each claim fairly and consistently in line with the policy terms and conditions.

Insurance Ireland also said it was committed to the Finance Minister and Central Bank of Ireland’s directions on business interruption insurance, issued in early April.

These directions specified that where there was ambiguity in the scope of cover, the insurer should rule in the claimant’s favour.

"It is important to note, however, that each policy is different and there may well be other factors which lead to the adjudication of whether a claim is valid or not," the insurance industry group said.

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