Minister of State Fleming notes Court Judgment of Business Interruption Insurance Test Cases

The Minister of State with responsibility for Financial Services, Credit Unions and Insurance, Seán Fleming TD, today (5 February) noted the judgment of the High Court in a number of test cases relating to business interruption insurance claims arising from COVID-19-related disruption.

Commenting on the judgment, Minister Fleming stated:

“I note today’s judgment by the Commercial Court. The findings are lengthy, the matter is complex and will need to be considered in detail.

The Government’s consistent view has been insurers should engage with impacted businesses honestly, fairly and professionally to honour the terms of the policy cover, in line with the Central Bank’s Consumer Protection Code. Separately, the Central Bank’s Business Interruption Insurance Supervisory Framework sets out its expectations of insurance firms in handling COVID-19 related business interruption insurance claims.”

While taking note that the Court will return to the issue of quantification of losses at a later date, Minister of State Fleming emphasises the importance that all insurers offering business interruption insurance carefully assess the ruling and how it may impact upon their policies.

Background Note:

It is understood that the quantification of losses will be dealt with at a later date.
Working to protect customers during and after the COVID-19 crisis, with particular emphasis on business disruption insurance, is a priority issue for the Government. This is reflected in the Programme for Government and the recently launched Action Plan for Insurance Reform (Actions 8-10).
In August 2020, the Central Bank published its Business Interruption Insurance Supervisory Framework , which sets out the Central Bank’s expectations of insurance firms in handling COVID-19 related business interruption insurance claims.
The judgment(s) handed down today by the Commercial Court (a division of the High Court) relate(s) to agreed test cases, and may be subject to appeal by either side.
Whether a business will be able to successfully claim on a business interruption policy due to a COVID-19 enforced closure will depend on the specifics of its policy, which is ultimately a matter of contract law between the business and its insurer. The Government cannot direct or require that insurers cover claims, including those resulting from infectious diseases such as COVID-19, nor can it adjudicate on the validity of such claims.
Where there is a disagreement between an insurer and a policyholder in relation to a claim, then the appropriate channels for resolving it must be followed – i.e. use of the Financial Services and Pensions Ombudsman (FSPO) or litigation.