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Minister says he expects insurers to 'play their part and act reasonably' by honouring claims

Claims are being rejected as Covid-19 is not on the list of infectious diseases on some policies.

Paschal Donohoe says insurers must not interpret policies to their own advantage at this time of national crisis.
Paschal Donohoe says insurers must not interpret policies to their own advantage at this time of national crisis.
Image: RollingNews.ie

FINANCE MINISTER PASCHAL Donohoe has called on insurers to act “reasonably” “play their part” and honour businesses’ claims for loss of earnings if they were advised by the government to close in order to contain the spread of Covid-19.

A number of businesses, including pubs, have been experiencing difficulties with their insurers in recent days, with insurance companies claiming that the fine print in their contracts does not specify coronavirus as a condition for a payout.

Officials in the department have been engaging with Insurance Ireland on the issue and other matters over recent days and will continue to do so, a spokesperson for the minister has said. 

Independent TD Mattie McGrath has said the insurance industry is acting in a “shameful” and unacceptable manner for refusing to compensate consumers for Covid-19 related incidences. 

“I am calling on the insurance sector to step up to the mark and to accept its financial duty toward those SME’s, businesses and farmers who have paid them substantial sums of money over many years for events just like this.

“What is the point of the insurance sector if people are going to be left struggling for cover just at the time when they require it the most?” said McGrath. 

Fianna Fáil’s Jackie Cahill has said he’s been contacted by a number of business owners frustrated that their insurance companies are not acting in good faith and are refusing to pay compensation.

There have been reports that some businesses with infectious disease cover are being told by insurance companies that a pandemic is not included in the policy or that Covid-19 is not listed in the policy as an infectious disease.

A spokesperson for the minister said 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. 

“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.   

“He believes that where businesses have had to close on the basis of advice or a direction to close by the Government, and their insurance policy covers such a scenario, that insurers should engage with those businesses honestly, fairly and professionally to honour those elements of the policies covered,” said the spokesperson. 

They added:

“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.  

“He believes that insurers should not try to distinguish between these situations, where there is a general infectious disease provision in a policy,  in order to avoid payment of claims.”

The minister believes the Government direction to childcare providers and also to pubs and clubs to close “is sufficient for those businesses to be able to make a claim on their insurance where the appropriate business interruption cover is in place”. 

In addition to the business interruption insurance issue, the minister has asked Insurance Ireland to engage with the industry as to what insurance companies can do to provide policyholders with some degree of relief over the next number of months and in this regard the minister expects that insurers to play their part and act reasonably. 

The Dáil was told last year that the profits of the insurance companies have skyrocketed in recent years. The 17 general insurers in the market made combined operating profits of €227 million in 2017, up from €16 million in 2016, according to Insurance Ireland.

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