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Law360, London (April 19, 2021, 12:30 PM BST) -- Insurers expect to pay out €430 million ($517 million) in claims to companies in Ireland forced by the COVID-19 lockdowns to close temporarily after court rulings in favor of policyholders with business interruption insurance.
Insurance Ireland, a trade association, said the figure is based on claims that have already been received, adding that insurers have so far paid out €62 million.
The High Court of Ireland said in February that FBD Insurance Group Ltd. should pay out to four pub owners under their business interruption policies. The test case mirrored the findings of a similar case at the Supreme Court in London in January.
"The COVID-19 pandemic is unprecedented in its impact and will be one of the biggest insured events of recent times," Moyagh Murdock, chief executive of Insurance Ireland, said on Friday. "These latest estimates demonstrate the support that Insurance Ireland members expect to offer their customers as a result of business interruption insurance-related claims across a wide range of policies."
Insurance Ireland said that its members have received 9,175 claims, of which they have accepted 35%. A further 36% of claims were denied, while 13% are still being assessed. The remaining 16% represent cases where claims were withdrawn by policyholders, the trade body said.
The Central Bank of Ireland has told insurers to take a "proactive and swift" approach to settling claims, warning that it would take action if they dragged their heels over payments.
The ruling in the Irish High Court case, which was handed down on Feb. 5, found that FBD customers with business interruption policies that included clauses for losses caused by outbreaks of disease, could be in line for payouts as a result of government COVID-19 lockdowns.
The legal dispute was seen as a test case for at least 1,000 other pub owners who had the same policy wording. FBD said it had put aside €65 million to pay out on claims as a result.
The Ireland test case mirrored that brought in the U.K. by the Financial Conduct Authority on behalf of an estimated 370,000 policyholders. The watchdog said last week that insurers have paid out £600 million ($834 million) in business interruption claims following the U.K. Supreme Court ruling in January.
--Editing by Ed Harris.
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