Has your business been impacted by COVID-19?

Might your business insurance policy cover
some of the financial losses?

Thousands of businesses have closed their doors due to COVID–19 and the related Government restrictions.
Your business insurance policy may allow a valid claim for compensation for business interruption. This type of insurance may allow a business to claim for financial losses due to suspension or restriction of activities.

Claims of this kind tend to arise when a business premises is damaged (e.g. fire or flooding) but may also extend to other causes. The wording within the policy itself is crucial. As ever, the devil is in the detail.
The Central Bank issued a letter to all Irish insurers on 27 March 2020 confirming that where cover exists for a business closure as a result of a government direction, “the recent government advice to close in the context of COVID-19 should be treated as such a direction”.
The Central Bank letter also advised insurance companies that the interpretation of any ambiguous clauses surrounding policy coverage for COVID-19 related claims should be read in favour of the insured.
Recent media reporting indicates that insurers are taking a restrictive approach to accepting business interruption claims due to COVID-19. Insurers are refusing indemnity on varying grounds including that COVID-19 was not actually on the business premises or that the business was closed not as a direct result of COVID-19 but only as a direct result of the related government restrictions.
Unfortunately, businesses may have little option but to consider legal proceedings if they wish to vindicate their rights and ensure the financial survival of their businesses.
Whether a particular commercial policy includes wording which might favour a valid claim must be examined on a policy by policy basis. It is advisable to carry out such a review as early as possible especially in circumstances where other pre-conditions must be met. Consideration also needs to be given to the obligation of the consumer to mitigate their losses (i.e. restaurants remaining open for take-away were possible from a health and safety viewpoint). All policies have strict financial excesses and limits.
If your insurer is unwilling to engage with you on the acceptance of your business interruption claim, you should promptly seek legal advice to explore your options.