Insurance companies' refusal to pay out claims is ‘deeply cynical’

The major insurance companies’ refusal to pay legitimate payouts to businesses affected by Covid-19 has been branded as “deeply cynical” and “not acceptable”.

Thousands of pubs, restaurants, and other businesses that shut their doors to comply with the Government’s request have been told by insurance firms that, because they acted voluntarily, there is no onus on them to pay out.

Businesses have also flagged that uncertainty about the designation of Covid-19 is also being used by insurance companies as a reason for not making payments.

The issue was raised at a private briefing of political leaders on Monday by Independent TD Mattie McGrath who said he got little succour from the Taoiseach.

Mr McGrath said when he raised it, Mr Varadkar simply responded: “How it works is that 100 people pay and one claims. They cannot pay out to everyone.”

Such is the level of anger, the Irish Examiner has confirmed that the Restaurants Association of Ireland (RAI) and some publicans have engaged lawyers to force the insurance industry to pay.

Adrian Cummins, CEO of the RAI, has said his members over the years have pumped billions into the coffers of the main insurance providers, and now is the time for them to pay up.

“The reaction so far has been absolutely awful. Many of our members have been told because they acted on a voluntary basis to shut their doors, they have been told their business disruption policies do not apply. It is scandalous,” he said.

“I have been given permission by my board to instruct our lawyers to challenge this — and we will, for our members,” he added.

The RAI, which represents 2,500 restaurants, is in discussions with barrister Gareth Robinson.

He said vintners have engaged leading legal firm Arthur Cox to pursue the matter from their end.

It is understood the RAI is talking to its members to allow them to be reviewed legally in preparation for a series of court cases against insurers refusing to pay out.

Fianna Fáil’s Michael McGrath and Sinn Féin’s Pearse Doherty have called on the finance minister to convene a meeting of the insurance bosses and “bring them to heel”.

Mr McGrath said the stance taken by the insurance companies is “deeply cynical”.

“The decision to close was voluntary in name only, especially in light of the new additional powers signed into law allowing the minister to order to closure of any premises found open.

“The Government must act now, and I am calling on Paschal Donohoe to convene a meeting with the insurance companies to deliver a workable package for companies,” he said.

Mr Doherty hit out at the failure of the Central Bank to exercise its legal powers and force the insurance companies to start paying out.

“The Central Bank totally failed us in the last crash and are about to do so again. The minister must act decisively by talking to the industry and make them play their part in this national effort,” he said.

Mr Doherty wrote to Mr Donohoe outlining proposals to rescue small businesses.