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Business interruption cover claims could sink global insurance sector

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Forcing insurers to cover business interruption losses that fall outside the original scope of policies would threaten the solvency of the industry on a global scale, rating agency DBRS has warned.

The failure of insurance companies in Ireland to pay out for business interruption cover has become a massive bone of contention. Industry groups say stricken companies will take legal action to recover losses they say are covered in their policies.

Jim Flannery, president of the Irish Claims Consultants Association and a director of Balcombes Claim Management which advises people on their insurance claims, said its analysis of insurance contracts found at least some policy holders should be entitled to compensation under the cover they had taken out ahead of the Covid-19 outbreak.