FBD digs its heels in on payment issue as Covid claim cases top 700
FBD has confirmed the receipt of more than 700 coronavirus-linked ‘business interruption’ claims from commercial clients, but the insurer has reiterated that it will not pay out over loss of business due to the Covid-19 crisis.
“FBD is strongly of the view that our business insurance policies do not provide cover for a pandemic of this nature and we have addressed all claims accordingly,” the company said.
“We are unable to provide cover for what we believe to be, and are advised is, an uninsured risk not covered by our policies,” it said.
However, FBD acknowledged “the disappointment and frustration” of affected businesses that their business interruption insurance doesn’t cover pandemics and it said it is “committed” to helping its customers.
"We understand the extraordinary and unprecedented challenges our customers are experiencing as a result of the actions taken by the Government to reduce the spread of Covid-19," the company said.
It said it has supports in place to help business customers who have had to temporarily close, such as a pro-rata premium refund relating to the closure, the maintaining of full cover for unoccupied premises without additional premium charges, and the offer of flexible premium payment arrangements.
FBD is at the centre of a legal battle with publicans over the Covid-19-business interruption cover issue, with a test case due to be heard by the Commercial Court in early October. FBD has approximately 1,300 pub owners among its business customers.
Regarding the legal challenge, FBD said it is confident in its interpretation of policy coverage and said it wishes to have the issues resolved as quickly as possible to achieve clarity and minimise costs for all parties.
Goodbody analyst Eamonn Hughes said FBD could be looking at a financial exposure of up to €30m across its pub portfolio if it were to lose the case.
“The insurer has substantial financial resources [around €93m in excess capital as of the end of 2019] even in any adverse outcome, bearing in mind that any adverse finding would also likely strengthen its hand with its reinsurers,” he said.
FBD’s share price fell on an otherwise relatively strong day for Irish stocks, but managed to pare back much of its earlier losses by close of trading.
