The Licensed Vintners Association and the Vintners Federation of Ireland have sharply criticised insurers who are refusing to honour "Business Interruption" cover for pubs who have been forced to close due to Covid-19. 

Allianz and FBD, two of the largest providers of business interruption cover to pubs, have confirmed to the LVA and VFI that they will not be providing this cover. 

The two pub representative bodies have called on the Government to immediately engage with the insurance industry here over the "disgraceful decision". 

They said that many publicans had intended to use this money to provide payment to their staff during the closure period, thereby reducing the burden on the social welfare system and the Exchequer. 

Donall O'Keeffe, chief executive of the LVA, said that at a time of national crisis, with the pub sector on its knees, these insurers have spurned the industryand are refusing to play their part in this emergency situation. 

"Many of our members had hoped to use the payments they would receive under their business interruption cover to continue to pay some or all of their staff," he said. 

"During this critical time that would not only help thousands of pub employees and their families, but it would also be in the national interest as it will reduce the demand for social welfare payments," he stated. 

"Given the tremendous strain that the Exchequer finances will be coming under this seems like the insurers are turning their backs on not just the pub sector, but the entire State," Mr O'Keeffe added. 

Padraig Cribben, the VFI's chief executive, said the current situation surely must constitute the very definition of business interruption. 

"Yet the insurers seem to be hiding between two arguments at present. Firstly that the decision taken by the pubs to close was not mandated by law and secondly that this crisis represents a 'force majeure' event," Mr Cribben said.

"Taking all these factors into consideration, we have now asked the Government to take immediate action," he said. 

"We would like the Government to engage with the insurance providers on this matter and to publicly outline their perspective on the role of insurers in supporting businesses and their staff.  

He also said he wants the Government request to close the pubs to be officially mandated in law. 

"We will take all necessary actions to push the insurance providers on this matter and will not rest until they do right by the pub sector and indeed the whole country on this issue," Mr Cribben stated. 

Insurance Ireland said standard business insurance policies are designed and priced to cover standard risks. 

"Standard policies typically refer to risks which are physically present on the business premises," it said.

"They are therefore unlikely to provide cover for the extraordinary preventative measures (up to and including decisions to close) that have been taken by many businesses to implement social distancing guidelines. Businesses should check the scope of their particular cover and speak to their insurance company or broker."

"However, Insurers are very conscious of the need to reduce cash-flow pressures for small businesses at this time of crisis."

"We are exploring a range of flexible options to allow businesses impacted by closure suspend or reduce cover and / or receive flexibility in payments. Insurers expect to be able to introduce these measures to customers impacted shortly."

Minister for Business, Heather Humphreys, said she was aware of the vintners' claims.

The minister said she had raised the matter with the Minister for Finance and has also written to the head of Insurance Ireland highlighting the issues.

She added that she is awaiting a response.