27/01/2021

Business Interruption Insurance

Covid-19 has caused huge interruption to businesses in Ireland. Many businesses have been faced with unreasonable decisions from their insurers in respect of coverage for their business interruption policies and a recent decision by the Irish High Court is a welcome development.

FBD Case

The case involved three Dublin Pubs and one Athlone Pub who sued FBD for failing to provide cover for losses sustained due to Covid-19 restrictions.

At the hearing last October, the Court considered a number of different issues on the “liability side” of the case including the interpretation of the “trends clause” in the policies where wider factors reduce a business’s ability to trade.

Business Interruption Clauses

The specific policies before the Court contained a clause that provided cover for “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”. FBD unsuccessfully argued that the closure of the pubs was not due to the outbreak of the disease but was instead caused by Government decisions. This followed a similar decision in the UK Supreme Court brought by the Financial Services Authority. FBD has confirmed that they are not appealing this decision and the case will come before the Courts on 17 February 2021 to discuss the losses which the four pubs are entitled to recover from their insurer.

Impact

The decision will be helpful to over 1100 pubs across Ireland that have an insurance policy with FBD and FBD has claimed in court that the total cost of these claims could be in excess of €30 million.

Augustus Cullen Law has previously been successful in overturning decisions made by insurers deemed to be unreasonable in a number of cases and is currently acting in similar cases to the FBD case regarding business interruption insurance.

If your business has been refused cover, get in touch and we will examine your policy and provide clear advice on how to proceed.

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