Business Interruption Insurance must not become the tracker mortgage scandal of the insurance industry - Pearse Doherty TD
Sinn Féin spokesperson on Finance Pearse Doherty TD has called on the Central Bank to put in place a Business Interruption Insurance Examination, similar to the Tracker Mortgage Examination, as the High Court makes its judgment tomorrow in a test case over FBD’s refusal to pay out for business interruption as a result of the Covid-19 pandemic.
Thousands of businesses have been denied claims by insurers despite being covered for business interruption as a result of Covid-19.
Teachta Doherty said:
“Tomorrow the High Court makes its judgment in a test case over the refusal of FBD to pay out for business interruption as a result of the Covid-19 pandemic.
“This judgment will have implications for thousands of businesses throughout the State who hold similar policies with FBD and other insurance companies.
“Since February last year, insurers have been refusing indemnity for business interruption caused by Covid-19 and public health restrictions which forced businesses to close, despite the explicit cover provided in insurance policies.
“While the FCA in Britain took a court action against eight insurers on behalf of thousands of businesses with different types of policies, the Central Bank took no such action.
“That inertia must end tomorrow, whatever the outcome of the High Court judgment.
“Without Central Bank intervention, tomorrow's judgment risks precipitating a tidal wave of litigation which would be costly and slow for thousands of businesses.
“There is an alternative and it involves the Central Bank doing its job.
“Since March I have been calling on the Central Bank to intervene.
“Today, I have written to the Governor of the Central Bank requesting that he put in place a Business Interruption Insurance Examination, similar to the Tracker Mortgage Examination.
“This would require an audit of policies held by businesses, clear expectations set out for insurers under each type of policy, intensive engagements and intrusive supervision.
“The consequences for insurers that fail to live up to these expectations or pay out valid claims for business interruption should be severe, with strict enforcement and heavy financial sanctions.
“Just as mortgage holders were dragged through the courts to confront the injuries inflicted by banks, small businesses risk being dragged through the courts to defend themselves against unscrupulous insurance companies. That must not happen.
“It is time for the Central Bank to step up to the plate and defend the interests of policyholders.”