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Law360, London (March 25, 2020, 3:24 PM GMT ) An Irish pressure group has criticized a refusal by insurance companies to pay out on claims for losses caused by business interruption over the coronavirus outbreak and has urged the country's central bank to step in.
The Alliance for Insurance Reform has asked the Central Bank of Ireland to make a public statement on how insurers should handle coronavirus claims. The group said, in a letter dated Monday, that insurers appear to be taking a "blanket ban" approach to claims for losses arising from COVID-19, the deadly virus that has infected more than 400,000 people worldwide.
"We request that the central bank, in its role as the consumer protection agency in the insurance market, makes a public statement on its approach to the issue," Peter Boland, the director of the lobby group, said. Boland said the central bank should step in to come up with a "sensible resolution of the problem."
The letter also urged the central bank to urgently meet representative bodies of businesses and insurers to discuss a solution.
"We cannot ignore the impact of the COVID-19 crisis and, in particular, the apparent blanket refusal of insurers to cover any business interruption caused by the crisis," Boland said.
Insurance Ireland, a trade body representing the sector, said Thursday that standard policies for business interruption will not generally cover the pandemic as they apply only to risks that are physically present on the premises.
"However, insurers are very conscious of the need to reduce cash-flow pressures for small businesses at this time of crisis," Gerry Hasset, interim chief executive of Insurance Ireland, said.
Insurers are exploring a range of flexible options to assist businesses during the coronavirus outbreak, the body said.
"Insurers expect to be able to introduce these measures to customers impacted shortly," Hassett added.
The sector is being hit hard by the coronavirus outbreak across Europe and the U.K.
The Association of British Insurers said Tuesday that travel insurers in Britain could be hit with a bill of at least £275 million ($321 million) in claims over the crisis, the highest pay-out on record for passenger flight cancellations.
Britain's Financial Conduct Authority has urged insurers to treat consumers fairly and flexibly during the crisis.
U.K. insurers, including Admiral, Aviva and Liverpool Victoria, have scaled back the scope of their travel insurance or have stopped selling policies outright, since the global outbreak of the coronavirus.
--Additional reporting by Martin Croucher and Najiyya Budaly. Editing by Ed Harris.
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