ARE YOU COVERED BY BUSINESS INTERRUPTION INSURANCE FOR LOSSES SUFFERED BY COVID-19?
The Covid-19 health crisis is having a devastating affect on businesses throughout the country. It’s impact has been particularly harsh on the hospitality and associated sectors, many of which have had to close their doors completely. The loss profits and expenditure facing the hospitality industry in particular are catastrophic. Can these losses be covered by Business Interruption Insurance?
What is business interruption insurance?
Business interruption insurance is insurance coverage that replaces the loss of income and operating expenses (employees’ wages, loan repayments, rent etc.) in the event that the business has to stop operating for some reason. Generally this reason would be because the business premises has been damaged due to a fire or a flood. Before the start of the year, no one would have envisaged having to stop operating due to a global pandemic. However, just because no one envisaged it, does not mean it does not apply. We are living in extraordinary times
Do I have Business Interruption Insurance?
Well, this will depend on each business’ individual policy. It is usually an additional type of coverage for a property insurance policy or, in some cases, it may be included in a package policy for business owners.
Are insurances companies paying out?
Unsurprisingly insurance companies are not eager to pay out on such claims. A recent article in the Irish Times states that insurers are rejecting claims on two grounds
a) Covid-19 is not a listed disease in the policies small print. Considering no one had heard of Covid-19 before December that is not surprising.
b) Many businesses, particularly in the hospitality sector, were not directed by Government to close down and did so of there own accord on the advice of Government. This is quite a literal argument and surely in the current climate, advice and direction from the government amount to one and same thing. This appears to be the view of the Department of Finance who ‘believes that insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage’.
However according to the insurance industry very few of these policies exist and the “standard of cover that the majority of businesses purchase does not include forced closure by authorities, as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade”. The Industry is further worried about their solvency in the event they are forced to pay out on claims that they have not re-insured.
What should I do if I think I have a claim?
- Get a copy of your policy.
- Notify your insurers of your claim.
- Contact us and we will arrange a video consultation, wherein we will go through your policy and advise you as to whether you have a state-able case.
HANAHOE AND HANAHOE SOLICITORS – LITIGATION SPECIALIST
For further information on Business Interruption Insurance or indeed any aspect of litigation or Commercial law, please do not hesitate to contact Hanahoe and Hanahoe Solicitors on 045-897784 (Naas Office) or on 01-5255637 (Dublin office) or firstname.lastname@example.org, on LinkedIn or Facebook
This article is merely for information purposes and is not and should not be taken as legal advice. No solicitor/client relationship or duty of care or liability of any nature exists between Hanahoe and Hanahoe solicitors, until you receive written confirmation that we are acting as solicitors on your behalf.