Many businesses have been forced to close due to Covid-19 and business owners are now turning to their insurance policies to see if this situation is provided for under their Insurance.
Business Interruption Insurance generally provides cover if your business suffers a financial loss as a result of property damage from a storm or a fire for example and can cover loses such as profits, fixed costs and extra expenses.
In the past week there have been a growing number of complaints from companies, particularly in the restaurant, pub and hospitality trades, that their insurers are refusing to pay out. The Licensed Vintners Association and the Vintners Federation of Ireland have sharply criticised insurers who are refusing to honor “Business Interruption” cover for pubs who have been forced to close due to Covid-19, with Allianz and FBD confirming to the Licensed Vintners Association and the Vintners Federation of Ireland that such a closure is not covered under their business interruption policies.
Claims specialist’s Owens McCarthy have stated that insurers are using the “small print” to throw out claims for business interruption because Covid-19 was not specifically listed among the diseases covered or because the infection did not happen on the policyholder’s premises. An example of such an infection/disease happening on and preventing access to a premises is where Legionella bacteria is found in the water supply for a Hotel or Restaurant.
Despite many Underwriters refusing to compensate businesses for a Covid-19 related closure, insurance polices are not black and white and one size does not fit all. We are advising clients that each policy will need to be assessed individually to establish whether there is a basis for a claim.
Sweeney McGann’s Employment and Commercial teams are providing practical advice to employers and business owners. If you would like to discuss the matter further please contact Aoife Hennessy or Gearoid McGann.