COVID-19 has caused significant hardship to many Irish businesses, especially those within the hospitality sectors. Many small and medium sized businesses (e.g. restaurants, pubs, cafes, entertainment venues) have had to close their doors or cease operations as a result of COVID-19.
Not only has this severely impacted their ability to serve their customers, but, for some, it has led to indefinite disruptions that are impacting their bottom line. Many businesses have Business Interruption policies (BI) which provide cover for losses arising from an interruption. Most SME policies are focused on property damage and have only basic cover for BI. Some policies also cover for BI from other causes, in particular “infectious” or “notifiable” disease. Many of these policies often define “infectious disease” by reference to an exhaustive list of such diseases and COVID-19 had not been identified when many of the affected Irish Businesses took out their policies. Other policies describe “infectious disease” as one which is notifiable to health authorities in Ireland, which includes COVID-19 since February 2020. The focus has now turned to determining if these policies provide cover for the losses arising from the measures taken by the Government following the outbreak of COVID-19.
The Central Bank of Ireland (CBI) recently published the ‘COVID-19 and Business Interruption Insurance Supervisory Framework’. This Framework sets out what it expects from insurers when dealing with claims arising from BI insurance policies as a result of the current pandemic. This Framework also sets out how it will engage with the insurers and its overall approach to supervision including escalation of any issues identified.
Our cross functional team made up of Regulatory, Actuarial and Risk Consulting professionals has prepared a guide to the Central Bank's new supervisory framework, which can be downloaded at the link below. We have extensive experience and will support you to get in front of this and to make decisions that are right for you, your customers and aligned to the CBI expectations.