Skip to Content
Dick Law Firm, PLLC Dick Law Firm, PLLC
Call Us Today! 833-774-4487
Top

Over 60% of COVID-19 business interruption claims are rejected by insurers

|

Nearly two-thirds of business interruption claims made by companies during COVID-19 have been refused by insurers, a major survey by the Alliance for Insurance Reform (AIR) has found.

The survey found that while only a third of the 2,095 respondents have made a business interruption claim to their insurer since the pandemic hit Ireland, but that 63% of them had been rebuffed.

Some 33% of claimants are still awaiting a decision for their insurer, meaning just 1% of claims to date have been accepted by insurers.

Furthermore, only 2% have taken their claim to the Financial Services and Pensions Ombudsman (FSPO) or taken legal action.

Insurers have declined any forbearance such as rebates, pauses or extensions in 18% of cases but have granted credit off next renewal in 12% of cases.

AIR said that deals on renewal don’t address urgent liquidity issues and prevents companies from shopping around though. The organisation has also called on the government to ensure insurers pay out.

‘The suggestion that this COVID-19 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,’ Michael Magner, chair of AIR’s COVID-19 working group, 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.’

AIR also called for the government to indemnify businesses and voluntary groups against COVID-19 personal injury claims, for the Central Bank to ‘intervene aggressively’ on behalf of policyholders, and for the FSPO to fast-track complaints to give businesses clarity.

AIR director Peter Boland said: ‘We cannot afford any further delays to proposed reforms in this area. Our members identified reductions in general damages, a more balanced duty of care, reductions in legal fees and increased sanctions for fraudulent and exaggerated claims as essential reforms in the context of COVID-19.

‘It is going to take a cabinet committee, chaired by the incoming Taoiseach, to guarantee that the State delivers on these and other essential insurance reforms quickly, so that insurance does not hamper the recovery of the nation.’