VFI to insurers: ‘What’s not infectious about Covid-19?’
Local publicans are facing a battle to get their insurers to pay out on loss of income during the Covid-19 crisis despite taking out cover for infectious diseases, while also coming to terms with the news at the weekend that they may have to remain shut until a vaccine is found.
Liam Gilleran, chairman of the Westmeath branch of the Vintners Federation of Ireland (VFI), says he is one of a number of local pub owners whose insurers are dragging their heels on the pay-outs issue.
“In my particular insurance policy it mentions that I am covered for infectious disease but the insurance companies are fighting that. My argument is that they sold us a policy under false pretences. What’s not infectious about Covid-19?”
At the weekend, Minister for Health Simon Harris said pubs could remain closed until a Covid-19 vaccine or an effective treatment is found, which it’s estimated will take at least 18 months.
Liam says the country is in “uncharted waters”, but that in his opinion he doesn’t see businesses such as his own remaining closed for the 18 months it’s estimated that it may take for a vaccine to be produced.
As experts believe that the number of new cases of this wave of the virus has plateaued, Liam hopes that in the coming months pubs and restaurants will be given an opportunity to re-open “on some scale, let it be small, medium or whatever”.
“The banks will still want a commitment off businesses to pay back their loans. When we are closed, that opportunity is taken away from us. It’s not as if businesses have been closed of their own free will. We have been closed by the government and rightly so too. They are doing it for the common good.”
If pubs were to remain closed until a vaccine or effective treatment for Covid-19 is found, the hospitality sector would be hit hard, Liam said.
“It would be difficult for anybody. No business, no matter how strong, can survive for that long.”
Deputy Robert Troy, Fianna Fáil spokesperson on Business, Enterprise and Innovation, has met the Central Bank in a bid to get insurance companies pay out to publicans.
Liam said: “Robert Troy is the main man who is doing it. He was speaking to the Central Bank last week and got a positive reaction from them. He’s also the one who is dealing with it through the Oireachtas, which is the place to deal with these big hitters.
“I don’t know any publican who has been paid anything yet under the infectious disease cover, but I know of many members in Mullingar, including myself, who have this in their insurance policy.
“Their argument is that if they pay out here they will have to pay out in Europe and the rest of the world. They are saying that if they do this, they will be insolvent. I don’t know where we are going to meet on this one, but at the moment Robert Troy is fighting a great battle.”
On March 15 the government called on all 7,400 pubs in the country to close for two weeks in a bid to slow the spread of the coronavirus. That was subsequently extended indefinitely.
Like everyone else in his industry, Liam has had to temporarily lay off staff with great regret as well as contending with the loss of his income. He also says that it’s important to keep a sense of perspective at this difficult time.
“Most pubs are dealing with the banks, Westmeath County Council and suppliers in their own way. I know Westmeath County Council has deferred payment. Whatever the charges are going to be at the end, I think at this stage it’s not a primary issue – it’s more that we all get out of this alive and get our doors open again. The other stuff will sort itself out down the line. Creditors have been tremendous. Guinness and Heineken, our main suppliers, are lifting stock that is going to be out of date very soon. They are playing ball with us.”
Liam, like many publicans around the country, has used the break to carry out work on his premises – Gilleran’s on Harbour Street in Mullingar.
He is looking forward to the day when will be able to welcome back his customers and get his business up and running again.
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“I prefer to see the glass half full rather than half empty. I know when people come into the pub when restrictions are lifted there will be a certain amount of nervousness hopefully Covid-19 will be under control and people will feel confident again and they will be ringing each other saying: ‘C’mon down the pub, the craic is mighty’.”
Speaking to the Westmeath Examiner yesterday, Deputy Troy said that insurance firms have an obligation to pay out to businesses with specific infectious disease cover.
He added that the government needs to put an resolution process in place under the auspices of the Ombudsman for Financial Services that would see claims dealt with in 12 weeks.
“Insurance Ireland are saying that if they concede on this it would break insurance companies. The simple fact of the matter is not every publican has this cover, unfortunately. Some publicans did have due diligence. We additionally prudent and did take additional cover. Any additional cover comes with an additional premium.
“They paid this additional premium so that God forbid in the event of business interruption came about because of an infectious disease they would be covered. Speaking to the VFI, they tell me that it’s approximately 50 percent of their members. Within that 50 percent there is an element that have a cap on their payment as well. The line from Insurance Ireland that this is going to break insurance companies is factually incorrect.
“We are fighting for the people who have paid a policy, who have legitimate cover and who are entitled to compensation for that.
“There will be elements of social distancing in place until a vaccine is established and this will hit the hospitality sector particularly hard. People take out insurance for worst case scenarios. There are people within the VFI who have paid an added premium on their policy to have added over. They need to have that cover honoured, the compensation needs to be paid and it should be done so without the need of going through expensive litigation.”