Two-thirds of insurance claims for business interruption have been refused
Almost two-thirds of businesses who lodged insurance claims for the interruption to their business due to Covid-19 have had their claims denied, a survey has found.
The Alliance for Insurance Reform has published the results of a survey which they said illustrates that the 'grip' the insurance crisis has on Irish society has been magnified by the Covid19 pandemic.
More than 2,000 businesses responded to the survey spread across the hospitality, transport, leisure, retail, healthcare, arts & entertainment and manufacturing sectors.
It found that 33% of respondents have made a business interruption claim and of these, 63% have already been refused their claim by insurers and an additional 33% await a decision. The insurance industry also declined any forbearance such as rebates, pauses or extensions in 18% of cases.
The survey also found that a third of businesses who have renewed their policies since the Covid-19 crisis began have seen their premiums fall but 22% have faced an increase.
The Alliance is a representative group formed with the objective of reducing insurance costs in Ireland. Its members include the Restaurants Association of Ireland, the Vintners' Federation of Ireland and the Irish Hotels Federation.
Michael Magner, Chair of the Alliance’s Covid-19 Working Group and owner of Cork’s Vienna Woods Hotel said the figures confirm what they are seeing every day of the week and said it is time for the State to take "meaningful action before irreparable damage is done to Irish businesses and voluntary organisations struggling to deal with Covid19."
“The Department of Finance must get insurers to play their part. The suggestion that this Covid19 crisis may prove to be a financial Armageddon for insurers is completely undermined by the relatively low level of requests for business interruption payments or forbearance," he said.
"The Department must now prioritise the ongoing survival of SMEs and voluntary groups which were already threatened by sky-high insurance costs; and are now faced with the refusal of insurers to engage on legitimate business interruption claims and requests for immediate forbearance.
Mr Magner also said that the State must move to indemnify businesses and voluntary groups against Covid-19-related personal injury claims and that the Financial Ombudsman (FSPO) must fast-track complaints already received to give urgent clarity to policyholders on where they stand.
