Coronavirus: Restaurateurs set to 'go to war' with insurance industry

Irish restaurateurs are preparing to “go to war” with the insurance industry regarding disputes over policy payouts on foot of the coronavirus crisis.

With the country on full lockdown since March 27, the industry has been ravaged by an enforced lack of business.

However, an alleged blanket refusal on the part of industry insurers to recognise the pandemic as being cause for compensation per the terms of their contracts has led to increasing conflict between the sides.

Now the Restaurants Association of Ireland (RAI) says it has a “roadmap” to take the fight to the various insurers involved, with Adrian Cummins, the association’s chief executive, describing the situation as “a scandal”.

"At present every insurer is saying 'no'. This is a scandal and one that merits a serious inquiry. They’re attempting to grind down small business owners for whom this whole situation is causing huge stress in terms of financial pressures. They don’t have the means to take the insurers on,” he said.

We’re saying 'we’re not going to let you beat them down, we’re going to fight back. We’re assembling the troops and we’re ready to go to war'.

There are more than 20 separate insurers with whom Irish restaurants currently have cover.  The RAI said it has commissioned a legal analysis of the various policies taken out by those of its membership who consented to disclosing their own terms with a view to tackling the issue, with the results of that analysis close to being actioned.

“We contacted our members to see if they wanted to participate and they passed their policies through us. Now we’ve come up with a report regarding the next steps. The roadmap for action is ready,” Mr Cummins said.

He said that in two-thirds of the cases which they have analysed a case can be made for compensation for his members under the business interruption clauses contained in the specific policy in question.

In 30% of those cases the RAI believes its members have a strong case. For the remaining third, however, no compensation is envisaged as being possible.

Mr Cummins said the coming legal action will be of the “shock and awe” variety.

Some of the reasons reportedly being offered by insurers refusing compensation include that a pandemic situation was not recognised when the policy was written and that the complicating factors did not occur on the premises of the outlet in question.

Both health and motor insurers recently agreed to rebates for customers due to the lower level of activity in those sectors as a result of the pandemic.

Commercial insurance has, however, proved a trickier prospect, with insurance firms facing a reported bill of up to €20 billion from affected businesses.

Last week industry group Retail Excellence Ireland said it likewise is considering taking legal action over alleged refusals to pay out to struggling shop owners.