Business Interruption Insurance & Covid

Salvadoor

Has anyone claimed Business Interruption insurance yet for losses of earnings/rent due to COVID 19? Any issues with your insurer?



Based on articles etc it appears FBD in particular are not going to pay out to pubs


https://www.rte.ie/news/business/2020/0319/1124163-pubs-business-interruption-cover/



https://www.irishtimes.com/business/financial-services/donohoe-weighs-in-as-insurers-reject-covid-19-claims-1.4209738

Eggs For Dinner

This is a very complicated issue and insurers are being put to the test at the minute. Basically, it comes down to the specific wording in your policy and there are 3 scenarios in play

1) Cover is clearly stated and insurers will meet their claims without question
2) Cover is clearly excluded and claims are being refused
3) Insurers might have intended to exclude such events, but their wording may vague and up to interpretation. In these circumstances, the law states that if a term is vague in a contract, it must go against the party who drew up the wording (the insurer) and that's what the Minister is referring to

The main bone of contention is that the cover for infectious disease was intended to compensate policyholders if there was an outbreak AT THE PREMISES resulting in temporary closure, not a pandemic like this

Bottom line, your policy document is King and all insurers use different wordings

Robbo

As of this week, FBD are now the defendants in 2 High Court actions where pubs are less than happy with the business interruption policies they were sold.

It's also worth noting that most SMEs would be able to vent their frustration about this to the Ombudsman and the Central Bank has already fired a few warning shots in this battle. Interesting times ahead.

Make It Real

Some of these cases will definitely go to court. The stakes are too high not to. Some precedents may fall from that.

The devil is in the detail of the policy wording, of course.

And what words "mean"! :pac:

Eggs For Dinner

FBD are certainly front and centre with this, though not on their own. Policy wording is the key. Nothing can (or should) make an insurer pay a claim if the policy doesn't cover it. Covid 19 is obviously a scenario which nobody has ever envisaged, so it is not surprising that policies can be vague. This is where policyholders have the best chance of success

markjbloggs

Eggs For Dinner wrote: »

FBD are certainly front and centre with this, though not on their own. Policy wording is the key. Nothing can (or should) make an insurer pay a claim if the policy doesn't cover it. Covid 19 is obviously a scenario which nobody has ever envisaged, so it is not surprising that policies can be vague. This is where policyholders have the best chance of success

What if the policy was mis-sold? If the pub owners were mislead into believing that any interruption to their business would be covered, then these cases could get very interesting.

Eggs For Dinner

markjbloggs wrote: »

What if the policy was mis-sold? If the pub owners were mislead into believing that any interruption to their business would be covered, then these cases could get very interesting.

Are you suggesting that policyholders believed they should have been offered cover for Covid 19 before Covid 19 was a thing? No policies cover "everything" , they state a very definite list of events

Without getting technical after a very long and difficult week dealing with this, I'll just say that the crux of the problem is that most policies cover losses following the outbreak of contagious diseases "at the premises" . From that you can see the problem

BTW, this is not just pubs, this is affecting every business that had to close

peteb2

markjbloggs wrote:

What if the policy was mis-sold? If the pub owners were mislead into believing that any interruption to their business would be covered, then these cases could get very interesting.

They weren't mis-sold. They just believed because their business was interrupted their insurance should pay out.

markjbloggs

Eggs For Dinner wrote: »

Are you suggesting that policyholders believed they should have been offered cover for Covid 19 before Covid 19 was a thing? No policies cover "everything" , they state a very definite list of events

Without getting technical after a very long and difficult week dealing with this, I'll just say that the crux of the problem is that most policies cover losses following the outbreak of contagious diseases "at the premises" . From that you can see the problem

BTW, this is not just pubs, this is affecting every business that had to close

What I said was that pub owners might have believed that they were covered for a disease-related interruption due to mis-selling of the policy - I never mentioned Covid-19.

Maybe it's just wishful thinking on my part, but a good outcome from this would be the Insurance industry feeling the pain that everybody else has had to endure.

Eggs For Dinner

markjbloggs wrote: »

What I said was that pub owners might have believed that they were covered for a disease-related interruption due to mis-selling of the policy - I never mentioned Covid-19.

Any insurance policy taken out by a business is designed to protect THAT business, not all of society. These policies DO cover disease related interruptions from an outbreak. ... "at the premises"

peteb2

markjbloggs wrote:

Maybe it's just wishful thinking on my part, but a good outcome from this would be the Insurance industry feeling the pain that everybody else has had to endure.

By making them financially responsible for the societal effect of a pandemic?? Why? Policies aren't priced to cover it. Look at Wimbledon.

Eggs For Dinner

markjbloggs wrote: »

Maybe it's just wishful thinking on my part, but a good outcome from this would be the Insurance industry feeling the pain that everybody else has had to endure.

Just on this point. The insurance industry is feeling the pain just like every other industry. If shops, pubs, factories, builders etc are not trading, they are not paying insurance. Reduced income hits the bottom line and losses, redundancies pay cuts are underway, just like a normal business.