63% of business interruption claims have already been refused by insurers, a new survey from the Alliance for Insurance Reform shows.
The survey reveals that only 33% of respondents have made a business interruption claim and of these, 63% have already been refused by insurers.
An additional 33% are waiting for a decision, while only 2% have taken their claim further via the Financial Services and Pensions Ombudsman (FSPO) or legal action.
The Alliance said that insurers have declined any forbearance - liquidity-related concessions such as rebates, pauses or extensions - in 18% of cases.
In a further 12%, the concession has been by way of a credit off the next renewal which the Alliance said does not address urgent liquidity issues and prevents shopping around.
Today's survey also reveals that 22% of those who have renewed their insurance cover since the onset of Covid-19 have seen a rise in their premium.
"In an environment where there is a substantial reduction in economic and social activity levels for all sectors and as such a massive reduction in risk and turnover, this rise in premiums is a cause for concern for all policyholders," the Alliance said.
Michael Magner, Chair of the Alliance's Covid-19 Working Group, said it is time for the State to take meaningful action before irreparable damage is done to Irish businesses and voluntary organisations struggling to deal with Covid-19.
Mr Magner said the Department of Finance must get insurers to play their part.
"The suggestion that this Covid-19 crisis may prove to be a financial Armageddon for insurers is completely undermined by the relatively low level of requests for business interruption payments or forbearance," he said.
"The Department must now prioritise the ongoing survival of SMEs and voluntary groups which were already threatened by sky-high insurance costs; and are now faced with the refusal of insurers to engage on legitimate business interruption claims and requests for immediate forbearance," he added.
The Alliance again called for the Central Bank to "intervene aggressively" on behalf of policyholders.
It also said that insurers must vigorously contest opportunistic or exaggerated claims related to Covid-19 in order to avoid a situation where such claims become a cottage industry in their own right.
