Life Insurance

Irish pubs toast insurance victory

Irish pubs have been shut down for large parts of the last 10 and a half months thanks to COVID-19 restrictions, which were more onerous on bars that don’t serve food. Such pubs were only allowed to trade for a total of two weeks, and not permitted to open at all in Dublin.

FBD has sold the policy at issue in the case to about 1,300 publicans throughout the country. The insurer estimated in July that the claims would cost €30 million ($36 million).

“It should never have come to this,” Noel Anderson, managing director of Dublin’s Lemon & Duke, told Reuters. “We were forced to go through 10 months of deep financial uncertainty, significant additional risk in taking this action, as well as extensive stress and strain to arrive at an outcome which should have been clear from the outset.”

Read more: Study: P&C insurers cannot absorb pandemic-related business interruption losses

FBD said it was committed all valid claims. The insurer said it would arrange to make interim payments while waiting for clarity on the final outcome, and expected the cost of claims to be “well within the range of considered financial outcomes.”

Ireland’s most recent lockdown closed pubs on December 24, after they had been reopened only briefly. The lockdown is unlikely to be lifted before April, according to Reuters.

In each of the four cases considered by the High Court, FBD declined cover on the grounds that the enforced closure didn’t arise as a consequence of a COVID-19 outbreak on any of the plaintiffs’ premises or within a 25-mile radius of those premises. Judge Denis McDonald, however, rejected that argument, ruling that the pubs may be indemnified for losses beyond the period of enforced closure until the losses cease or the indemnity period ends, according to Reuters.

The Irish ruling echoes decisions by Britain’s highest court last month and a French court last year.

Irish Deputy Prime Minister Leo Varadkar said the ruling was good news for Irish small businesses. The country’s central bank also praised the ruling. The central bank has estimated there are approximately 90,000 business interruption policies in Ireland, Reuters reported.   

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