Following landmark rulings in the UK and Ireland concerning disruption to businesses as a result of the COVID-19 pandemic, which largely favoured insureds, the Central Bank of Ireland has reportedly written to numerous insurers pressing them to pay out on valid claims, reports The Irish Times.
Back in January, the UK Supreme Court upheld the judgement on the Financial Conduct Authority’s (FCA) business interruption (BI) insurance test case, ruling in favour of policyholders on the majority of key issues.
For re/insurers Arch, Argenta, Hiscox, MS Amlin, RSA, and QBE, this meant that their appeals were dismissed and that the coverage has to be honoured.
Earlier this month, the Commercial Court in Ireland ruled that FBD Insurance must compensate four pub owners for the disruption caused to their businesses as a result of the COVID-19 pandemic.
At the ruling, Justice Denis McDonald found that a policy sold by the insurer covered losses the pubs suffered by having to close as a result of the pandemic.
Reportedly, this could cost the insurer as much as €60 million, while the outcome of the ruling affects claims made by more than 1,000 pubs and restaurants in Ireland.
According to a report in The Irish Times, sources have said that the Central Bank in Ireland may issue directions or even resort to the courts to obtain enforcement orders against carriers that fail to pay out valid business interruption claims, and this includes where there is doubt over the meaning of a policy term.