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Coronavirus: Insurance industry accused of leaving Northern Ireland business in the lurch

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The Assembly economy committee met on Monday with most participants taking part remotely.

The Assembly economy committee met on Monday with most participants taking part remotely.

The Assembly economy committee met on Monday with most participants taking part remotely.

Insurers have been accused of leaving Northern Ireland businesses in the lurch over Covid-19, a Stormont Committee has heard.

Alistair Ross from the British Association of Insurers faced questions about “intransigence” over payouts from his sector at the Economy Committee this morning.

The committee chair, Sinn Fein's Caoimhe Archibald, questioned if the insurance industry was “exploiting ambiguity” as lockdown has brought many businesses to a standstill in recent months.

The DUP MLA Gordon Dunne also questioned why some businesses who had claims refused were now being told they can’t buy pandemic insurance.

He added that insurers could not expect their reputations to be the same after the pandemic has passed.

Mr Ross said most businesses' insurance policies did not cover pandemics, pointing out it was not considered a likely risk even six months ago.

He added a High Court case with the Financial Conduct Authority would bring more clarity later this summer.

He maintained it was “unfortunate” that the vast majority of businesses would not be covered, and that insurance was a regulated product that was usually bought after professional advice.

Mr Ross did not have a specific figures for insurance payouts for businesses in Northern Ireland since lockdown restrictions began, but offered to follow up on any specific cases with the committee.

Asked why it was so difficult for firms to get pandemic cover now, Mr Ross said it was inevitable that the value of premiums would go up if the “possibility becomes a probability” of disruption caused by Covid-19..

Mr Dunne said this would be “most disappointing” but not surprising for the ordinary man on the street.

Ms Archibald asked Mr Ross why the insurance industry appeared to be the one sector that “wasn’t playing ball” in helping businesses to survive the pandemic, after years of paying expensive premiums.

DUP MLA Gary Middleton said one business had been forced to close their doors due to government restrictions, and had worked hard to make sure there were no Covid-19 cases on site.

“They have been told by their insurers that had there been someone with coronavirus on their premises then they would have got a pay out.

“To me and that business that seems unfair given that they’re almost being punished for not having coronavirus on their premises.”

He added that many businesses were facing closure as they could not afford to wait weeks for an insurance payout or for a court judgement.

Mr Ross replied: “I can understand exactly that situation where businesses have been asked to follow advice and done what they’ve been asked to do.

“Sadly nobody wants to have coronavirus on their premises, regardless if (it means) they can make an insurance claim or not.”

He said businesses who felt they were being treated unfairly can raise complaints with their insurers or take it to the Financial Ombudsman Service.

Ms Archibald said sectors like hospitality and childcare were now seriously concerned about the level of cover available to them moving forward.

“In terms of the wider economy, everybody has stepped up in terms of mitigations with banking institutions and others and it just seems that the insurance is the one institution is the one that isn’t playing ball," she said.

Mr Ross said he did not believe it was a fair to say the insurance industry was not being active.

He said recent efforts to counter the impact of Covid-19 included reaching agreement with the UK Treasury for a scheme to the value of £10bn to allow insurers to keep writing general insurance policies supporting businesses.

“We’re certainly not being quiet, or members have worked incredibly hard to get to a point where we can maintain pre-credit insurance for the market.”

Belfast Telegraph