TheMinister believes that more work has to be done to get the insurance sector on board from the point-of-view of publicans around the country.
While the insurance industry is claiming that policies for communicable diseases and viruses do not specifically cover this virus, the Minister for Finance appears to be saying that if the pubs were asked by the Government to close, then that should be taken as an instruction to them to close.
There was now in place a de facto Government directive to close in that any pub found open would now be forcibly closed.
“Where a policy states that a claim can be made when a business has closed as a result of a Government direction, because of a general notifiable infectious disease, the Minister believes that Government advice to close a business amounts to the same thing,” a spokesman for the Department said.
“He believes that insurers should not try to distinguish between these situations, where there is a general infectious disease provision in a policy.
“In relation to business interruption insurance, whether a business can make a claim in relation to loss of earnings because of closure due to Covid-19 will depend on the specifics of their policy,” the spokesman said, “However, the Minister, as a general rule, believes that insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage.”
The Alliance for Insurance Reform had earlier called on the Government to intervene in the insurance crisis following a statement from Insurance Ireland that its member companies would not be paying out on Covid-19 claims for the majority of hospitality businesses affect by the coronavirus outbreak.
While the Minister for Finance believes that insurers should not attempt to reject claims on the basis of interpreting such policies, for its part the insurance industry has claimed that very few such policies exist as the “standard of cover that the majority of businesses purchase does not include forced closure by authorities, as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade”, with Insurance Ireland having warned that the solvency of its members could be hit if insurers were forced to pay out on uncovered claims with no recourse to their own insurers.
With the exception of FBD all other insurance companies here are owned by overseas groups and no company wishes to be seen to set a precedent in Ireland that could be used elsewhere. Paying out on such a claim, warned Insurance Ireland, would affect customers in that if they paid out on claims not specifically covered by these policies this money would not be recouped from reinsurance companies who buy the risk from the original insurer.
The industry body added that if insurers paid out on claims that were not covered, it would generate “significant stability issues for the industry” and customers.
“It is unlikely that reinsurance contracts would respond in such a scenario and therefore it would be a solvency event for many insurers,” it said.
The insurance companies’ stance drew the ire of Cork South West Deputy Christopher O’Sullivan who described such insurance companies, in a time of crisis, trying to manipulate their own policies in their own favour is “an all new low”.
Many pubs closed their doors for the public good and at huge personal cost, he said, adding that, “It is utterly disheartening and disappointing to hear business owners are being abandoned at a time when the whole country is trying to pull together to combat this crisis.”