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A senior government minister in Ireland has reportedly warned that a watchdog agency may have to get involved if insurers fail to pay business interruption claims.
This comes after Ireland’s High Court ruled in favor of a number of pubs challenging its insurer’s refusal to pay for business losses during the pandemic lockdowns. Last week, the court sided with the pubs and other small to mid-sized businesses in the test case claiming that insurers wrongly denied the business interruption claims.
After the ruling, Deputy Prime Minister Leo Varadkar said that the businesses may be due “a substantial financial payment.”
“This could have significant implications for thousands of businesses that have similar policies with this company and others,” stated the minister on Twitter.
“There may now be a role for the Central Bank, the financial regulator in this instance…having a role and making sure that people get the payouts they’re entitled to,” he continued.
Hundreds of Irish pubs that were forced to close during a trio of national lockdowns are due a payment by insurer FBD Group PLC, per the High Court’s ruling. The company has earmarked €30 million ($36 million) to payout business interruption claims as a result of the ruling, according to Law360.
Though FBD Group PLC has reportedly stated that it had no plans to appeal the decision, the Central Bank of Ireland said it was ready to assist those who may be due funds under their business interruption policies with insurers.
“We will be closely examining the potential impact of this judgment for customers in the context of our sustained and ongoing engagement with relevant firms,” the watchdog agency said in a statement issued after the ruling.
U.K. Businesses Win Test Case
Small businesses in Ireland and the UK may also be able to claim benefits under other recent test cases surrounding business interruption insurance. Under a U.K. Supreme Court ruling, £1.2 billion will be distributed amongst nearly 400,000 policyholders claiming COVID losses. This U.K. ruling could affect at least 60 insurance companies.
Business owners in other countries are also struggling with their insurance companies, many saying their business interruption claims were wrongly denied. In Canada, major insurers, such as Aviva, the Co-operators, Intact and Gore Mutual have allegedly denied legitimate claims.
Meanwhile, in Australia insurance companies are being taken to task with a number of COVID-19 payout class action lawsuits alleging they failed to address claims in a timely manner. Australian business owners also say that they have been suffering as insurers take as long as possible to make a COVID-19 payout.
Do you own a small business that was forced to close due to coronavirus lockdowns? Did you make a claim under your business interruption insurance policy? Tell us what happened in the comment section below.
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