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The impact of Covid-19 on the global insurance industry – Ireland

Tuesday 12 July 2022

Erica Heslin
Matheson, Ireland
Erica.Heslin@matheson.com

Sharon Daly
Matheson, Ireland
Sharon.Daly@matheson.com

Ireland

General questions

Yes/ No/ NA

Additional comments, if any.

1

Does the country that you are reporting on follow common law jurisprudence?

Yes

2

If the answer to the above question is no, does the country you are reporting on follow a civil code? Please describe the judicial system in short.

NA

3

Please provide a brief description of the legal framework applicable to insurance coverage disputes in the country you are reporting on. In so doing, please consider the following questions:

In Ireland, insurance coverage disputes can be brought through the courts’ system or resolved by way of alternative dispute resolution such as mediation or arbitration. The jurisdiction of the court proceedings will be determined by the value of the claim being brought, and claims will be heard by a judge without a jury. In the District Court, claims may be brought up to the value of €15,000. In the Circuit Court, claims may be brought up to the value of €75,000, or €60,000 in the event of a Personal Injuries dispute. The High Court will adjudicate on claims above this value (or Commercial Court where the dispute is commercial in nature and the monetary value exceeds €1 million).

4

Does the insured bear the burden of establishing coverage of a claim, or does the insurer bear the burden of establishing no coverage? Please give a short description of the legal basis in your country

Yes

The onus is on the insured throughout the claims process to establish the case it is making as to the occurrence of an insured peril and the extent of the loss.[1] The terms of the policy provision determine the extent of the insured’s obligations. A provision requiring the insured to provide full particulars of the loss is not taken literally but is deemed to mean the best particulars the insured can reasonably give.[2]

The  proof submitted must establish the claim on the balance of probabilities and must be furnished in the manner required by the policy provisions. A provision requiring  proof satisfactory to insurers means such  proof as the insurers might reasonably require.

5

Are coverage provisions in policies interpreted broadly or is there a presumption in favor of coverage? Please give a short description of the legal basis in your country

The rule of contra proferentum applies to insurance contracts in Ireland. This means that where there is ambiguity in a contract, the contract will be interpreted against the interests of the party who put forward the wording, which is the insurer. The principle was used in the Supreme Court case of Analog Devices B.V. v Zurich Insurance Company [2005] IESC 12 by Mr Justice Geoghegan, where he quoted Clark’s Contract Law of Ireland at p149 which notes: “If the exempting provision is ambiguous and capable of more than one interpretation then the courts will read the clause against the party seeking to rely on it.” This was also raised in the recent Irish Commercial Court decision of Mr. Justice McDonald in Hyper Trust Limited v FBD [2020] (the “FBD Test Case”), where it was noted: “In the case of a standard form policy produced by an insurer, ambiguity in the language of the policy will be construed against the insurer.

6

Are exclusions interpreted narrowly or is there a presumption against finding that an exclusion to coverage applies? Please give a short description of the legal basis in your country

As noted, the burden of proof of insurance falls on the insured to establish cover. However, the burden shifts to the insurer where an exclusion to coverage may apply. This is due to the above noted rule of contra proferentum.

7

Are there universally accepted definitions for:

  • Event
  • Occurrence
  • Damage
  • Cause
  • Originating cause
  • Natural peril
  • Force majeure
  • Loss
  • Consequential loss

If the answer is yes, please give a short description of each definition and the legal basis for that definition (i.e. a rule of law, case law etc.).

No

Most definitions are set out in the contract. The concept of cause and originating cause have been considered in UK Jurisprudence which is persuasive in Ireland.

The following definitions are included in Murdoch and Hunt’s Encyclopedia of Irish Law:

Damage  - Loss or harm, physical or economic, resulting from a wrongful act or default and generally leading to an award of a measure of compensation. Generally a wrong to be actionable must result in damage, except that some wrongs (e.g. libel, trespass) are actionable per se.

Cause - In relation to an occurrence, means any action, omission, event, or condition, or combination thereof, which led to the occurrence, but has no implication regarding liability or fault: Air Navigation (Notification and Investigation of Accidents, Serious Incidents and Incidents) Regulations 2009 (SI No 460 of 2009).

Force majeure - An overpowering event which could not be anticipated or controlled e.g. an Act of God (qv). Contracts often contain a force majeure clause. A force majeure may amount to a frustration (qv) of the contract.

Loss - Unless a policy of insurance provides otherwise, the insurer is liable for any loss proximately caused by a peril insured against. See Marine Insurance Act 1906 s.55.

However, these are not universally accepted definitions.

Loss Causation    

(Yes/No /NA)

Additional comments, if any.

8

Did the country that you are reporting about issue lock-down, stay-at-home, or no-travel restrictions in response to COVID-19?

Yes

9

If the answer to the question above is yes, were such orders issued nationally, by state/region, or by local city/town. Please give a short description of the issuing authority and the orders issued.

Nationally and by county

“Level 1” lockdown includes

  • A maximum of 10 guests from 3 other households
  • A maximum of 100 guests at weddings
  • Depending on venue size, indoor events have a maximum of 200 guests, and outdoor events have a maximum of 500 guests
  • Normal sports training with protective measures
  • For sports and entertainment events, indoor events have a maximum of 100 attendees, outdoor events have a maximum of 200 attendees and stadia have a maximum of 500 attendees
  • Gyms, pools and leisure centres are open with protective measures
  • Religious services have a maximum of 50 attendees
  • Dry pubs, cafés and restaurants are open with protective measures
  • Wet pubs are open with protective measures
  • Hotels, guesthouses and B&Bs are open with protective measures
  • Retail and services are open with protective measures
  • Indoor cultural venues are open with protective measures
  • Work from home (if possible) and staggered attendance
  • No restrictions on domestic travel
  • Public transport is at 75% capacity with mandatory face coverings
  • Schools and childcare are open with protective measures
  • Adult and higher education are open with protective measures
  • Care homes are open with protective measures

“Level 2” lockdown includes

  • A maximum of 6 guests from 3 other households
  • A maximum of 50 guests at weddings
  • Depending on venue size, indoor events have a maximum of 100 guests, and outdoor events have a maximum of 200 guests
  • Sports training in pods of 6 people indoors and 15 people outdoors
  • For sports and entertainment events, indoor events have a maximum of 50 attendees, outdoor events have a maximum of 100 attendees and stadia have a maximum of 200 attendees
  • Gyms, pools and leisure centres are open with protective measures
  • Religious services have a maximum of 50 attendees
  • Dry pubs, cafés and restaurants are open for groups of 6 from up to 3 households
  • Wet pubs are open for groups of 6 from up to 3 households
  • Hotels, guesthouses and B&Bs are open with protective measures
  • Retail and services are open with protective measures
  • Indoor cultural venues are open with protective measures
  • Work from home other than essential meetings, induction and training
  • No restrictions on domestic travel
  • Public transport is at 50% capacity with mandatory face coverings
  • Schools and childcare are open with protective measures
  • Adult and higher education are open with protective measures
  • Care homes are open with enhanced protective measures

“Level 3” lockdown includes

  • A maximum of 6 guests from 1 other household
  • A maximum of 25 guests at weddings
  • No organised indoor events, and outdoor events have a maximum of 15 guests
  • Sports training in pods of 15 people outdoors (non-contact) and individual training indoors
  • Sports and entertainment events are not permitted except for specific exemptions
  • Gyms, pools and leisure centres are open for individual training only
  • Religious services move online except for maximum attendance of 25 people at funerals
  • Dry pubs, cafés and restaurants have a range of restrictions up to and including no indoor dining
  • Wet pubs have a range of restrictions up to and including no indoor dining
  • Hotels, guesthouses and B&Bs are open with services limited to residents only
  • Retail and services are open with protective measures
  • Indoor cultural venues are closed
  • Work from home other than if absolutely necessary
  • Domestic travel is restricted to each county, except for work, education and essential purposes
  • Public transport is at 50% capacity with mandatory face coverings
  • Schools and childcare are open with protective measures
  • Adult and higher education are open with protective measures
  • Visiting is suspended in care homes aside from critical and compassionate circumstances

“Level 4” lockdown includes

  • No visitors allowed in the home
  • A maximum of 6 guests at weddings
  • No organised indoor events, and outdoor events have a maximum of 15 guests
  • Sports training in pods of 15 people outdoors (non-contact) and individual training indoors
  • Sports and entertainment events are not permitted except for specific exemptions
  • Gyms, pools and leisure centres are closed
  • Religious services move online except for maximum attendance of 25 people at funerals
  • Dry pubs, cafés and restaurants are open for outdoor dining and delivery only
  • Wet pubs are open for outdoor dining and delivery only
  • Hotels, guesthouses and B&Bs are closed except for existing guests and essential purposes
  • Retail and services are primarily outdoors except for essential retail and services
  • Indoor cultural venues are closed
  • Work from home other than essential and other designated workers
  • Domestic travel is restricted to each county, except for work, education and essential purposes
  • Public transport is at 25% capacity with mandatory face coverings
  • Schools and childcare are open with protective measures
  • Adult and higher education are online with on-site attendance only when essential
  • Visiting is suspended in care homes aside from critical and compassionate circumstances

“Level 5” lockdown includes

  • No visitors allowed in the home
  • A maximum of 6 guests at weddings
  • No organised events
  • Individual sports training only
  • Sports and entertainment events are not permitted
  • Gyms, pools and leisure centres are closed
  • Religious services move online except for maximum attendance of 10 people at funerals
  • Dry pubs, cafés and restaurants are open for takeaway and delivery only
  • Wet pubs are open for takeaway and delivery only
  • Hotels, guesthouses and B&Bs are closed except for essential purposes
  • Retail and services are closed except for essential retail
  • Indoor cultural venues are closed
  • Work from home other than essential workers
  • Stay at home and exercise within 5km
  • Public transport is at 25% capacity with mandatory face coverings
  • Schools and childcare to be assessed based on situation and evidence at the time
  • Adult and higher education to be assessed based on situation and evidence at the time
  • Visiting is suspended in care homes aside from critical and compassionate circumstances

All restrictions and guidelines can be found here and were imposed nationally by the Government of Ireland, apart from the following which were imposed in specific counties by the Government of Ireland:

  • On 7 August 2020, it was announced that there would be a series of additional measures imposed on counties Kildare, Laois and Offaly (S.I. 295/2020):
    • Residents were not be permitted to travel outside of their counties except for in limited circumstances including to travel to and from work.
    • Restaurants, cafés, pubs serving food, cinemas, gyms, theatres, museums, galleries, bingo halls, casinos, betting shops, leisure centres and other indoor recreational and cultural outlets were to be closed.
    • All retail outlets could remain open but with strict adherence to public health guidelines, including the wearing of face coverings.
    • All indoor gatherings were to be restricted to 6 people and outdoor gatherings restricted to 15 people.
  • On 7 August 2020, it was announced that there would be a series of additional measures imposed on county Dublin so that it would fall into Level 3 of the Re-Opening Plan (S.I. 352/2020):
    • All indoor museums, galleries, cinemas and other cultural attractions were closed.
    • Visitors were allowed from one other household only.
    • No organised indoor gatherings could take place. Organised outdoor gatherings up to only 15 people were permitted.
  • People living in Dublin had to remain in the county, with the exception of those who needed to travel for work, education and other essential purposes. People living outside of Dublin could not travel to Dublin, with the exception of those who must travel for work, education and other essential purposes.
    • Schools, early learning and childcare services remained open.
    • Retail and services such as hairdressers and beauticians remained open with protective measures.
    • Restaurants and cafes (including pubs serving food) were open for takeaway and delivery and outdoor dining to a maximum of 15 people. Hotels, guesthouses and B&Bs could remain open, but with services limited to residents.
  • On 25 September 2020, the above Statutory Instrument was amended to include County Donegal (S.I. 375/2020).
  • On 15 October 2020, it was announced that there would be a series of additional measures imposed on counties Donegal, Cavan and Monaghan so that they would fall into Level 4 of the Re-Opening Plan (S.I. 442/2020):
    • No visitors to private homes or social gatherings were allowed.
    • Up to 6 guests could attend a wedding ceremony and reception.
    • All gyms, leisure centres, swimming pools, museums, galleries and other non-essential businesses and services were closed.
    • Up to 25 mourners could attend funerals.
    • Restaurants, bars and cafés could only open for takeaway and delivery.

10

If the answer to the above question is yes, were the lock-down, stay-at-home, or no-travel restrictions mandatory or recommended? 

Mandatory

As a result of the COVID-19 pandemic, the Irish Government have signed a number of laws into place which are by nature mandatory measures. On 20 March 2020, the Health (Preservation and Protection and Other Emergency Measures in the Public Interest) Act 2020 was brought into force. This was followed by the Health and Criminal Justice (COVID-19) (Amendment) Act 2021, which has allowed the government to extend measures until 9 February 2021. This legislation affords the Minister for Health powers to bring measures into law in order to help reduce the spread of COVID-19, such as restricting travel, closing premises and stopping gathering of people from taking place.

Since 2020, a large number of Statutory Instruments have been signed into law. A full list of these can be found here.

11

If the country that you are reporting about did issue lock-down, stay-at-home, or no-travel restrictions, were those orders suspended or revoked at any point in time? If the answer is yes, please give a short description of the timeline. 

Initial lockdown was introduced from 24 March 2020 until phased reopening from 18 May 2020, with various restrictions removed on 18 May 2020, 8 June 2020 and 29 June 2020. Full reopening was paused in August 2020.

12

If the answer to the above question is yes, were subsequent lock-down, stay-at-home, or no-travel restrictions issued at any point in time? Please give a short description of the timeline. 

Yes

Enhanced restrictions were introduced on 18 August 2020. By 5 October 2020, “Level 3” restrictions had been re-imposed nationwide. Counties Donegal, Cavan and Monaghan were placed into “Level 4” lockdown on 15 October 2020. Following this, a nationwide “Level 5” lockdown was imposed on 22 October 2020. Throughout December 2020, there was easing of restrictions to “Level 3” lockdown with additional allowances for the Christmas holiday. “Level 5” restrictions were re-introduced from 26 December 2020, with the additional measure of schools being closed. Phased reopening of schools began on 1 March 2021 with phased easing of other “Level 5” restrictions beginning on 12 April 2021. Construction was permitted from 26 April 2021, and inter-county travel was allowed from 10 May 2021 with the reopening of all hairdressers and other services. From 17 May 2021 the reopening of all retail outlets was permitted. Further restrictions were eased in the food and beverages industry from 7 June 2021 with indoor services in restaurants and pubs allowed for fully-vaccinated persons from 26 July 2021. The phased return to the workplace commenced on 20 September 2021 and nightclubs were permitted to open from 22 October 2021. The closing time for bars, restaurants and nightclubs was changed to midnight on 16 November 2021 and nightclubs were closed again on 7 December 2021. An 8pm closing time was introduced for bars, restaurants, live events, cinemas and theatres on 20 December 2021. On 22 January 2022 almost all restrictions were removed, other than rules relating to isolation and the wearing of masks in certain settings, with mask wearing restrictions being removed on 28 February 2022.

13

Has the country that you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is a “cause” of insured loss?

Yes

See response to Q18.

14

Has the highest court in the country you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is a “cause” of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

No

15

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to COVID-19 were “caused” by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

16

If the answer to the above question is no, did the highest court in the country you are reporting about determine that losses related to COVID-19 were “caused” by government lock-down or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

17

Has the country that you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is an “originating cause” of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

No

NA

18

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analyzing whether COVID-19 is a “cause” of insured loss, have other courts in the country issued such opinions?

Yes

“Test Case” – A legal action whose purpose is to set a precedent.

The issue of whether or not COVID-19 is a “cause” of insured loss is dependent on the wording of the policy in the specific case. It was held by Mr Justice McDonald at in the FBD Test Case that unless an insurance policy otherwise provides, an insurer will be liable only for losses which are proximately caused by a peril insured against. Therefore if loss occurs under an insurance policy which insures against COVID-19 as a peril, COVID-19 can be determined to be a “cause” of insured loss. Mr. Justice McDonald also held that proximate cause is an important concept in determining liability under insurance contracts.

19

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether COVID-19 is a “cause” of insured loss? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

Insufficient information at this point. However, all decisions have been given by the commercial division of the High Court and they are consistent. Separately the Financial Services and Pensions Ombudsman (the “FSPO”) has made numerous anonymised determinations. These do not appear to be consistent but due to the manner in which they are reported it is impossible to understand the points of distinction and whether the determinations are consistent. The FSPO has had regard to The Financial Conduct Authority v Arch and Others (the “FCA test case”) and the decisions of the Irish High Court but it has broader powers in respect of the conduct of the financial institution which it has exercised and which may not be consistent.

20

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to COVID-19 were “caused” by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

Yes

See response to Q18. The rulings have varied in accordance with the wordings of the insuring clauses.

21

If the answer to the above question is no, do courts in the country you are reporting about determine that losses related to COVID-19 were “caused” by government lock-down or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

NA

22

Has the highest court in the country you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is an “originating cause” of insured loss?

No

NA

23

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analyzing whether COVID-19 is an “originating cause” of insured loss, have other courts in the country issued such opinions? If yes, please give a short description of the conclusions in such judicial opinions or guidance.

No

NA

24

Has the country that you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is a covered “event”?

No

NA

25

Has the highest court in the country you are reporting about issued judicial opinions or guidance analyzing whether COVID-19 is a covered “event”? Please give a short description of the conclusions in the judicial opinions or guidance.

No

NA

26

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to COVID-19 were covered “events”? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

NA

27

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analyzing whether COVID-19 is a covered “event”, have other courts in the country issued such opinions?

No

The Irish High Court has determined that whether or not COVID-19 is a covered “event” or an “insured peril” will depend on the policy document in question. Loss will only be covered where the policy document specifies the event as an insured peril. In certain cases, such as in the judgment of the FBD Test Case, enforced closure due to COVID-19 has been held to be an insured peril and therefore covered by the insurance policy. However, it has been held in other cases, for example Brushfield Limited (trading as The Clarence Hotel) v Arachas Corporate Brokers Limited and AXA Insurance DAC [2021] IEHC 263 (the “AXA test case”), that COVID-19 is not to be considered a covered event under the wording of that AXA policy. Mr. Justice McDonald was the presiding judge in both of these cases and the difference in outcome is due to the difference in wording of the insurance policies in question.

28

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether COVID-19 is a covered “event”? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

NA

29

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to COVID-19 are covered “events”? Please give a short description of the conclusions in the judicial opinions or guidance.

NA

NA

30

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of COVID-19 in the context of loss causation.

On 5 August 2020, the Central Bank of Ireland published its Covid 19 and Business Interruption Insurance Supervisory Framework (the “ CBI Framework”).

The CBI Framework notes that “many BI insurance policies are not responsive to the circumstances of business interruption and / or interference related to the outbreak of Covid 19 in Ireland. However in some cases, BI insurance policies may either be clearly responsive, or a strong or reasonable argument can be made that they are responsive to the current circumstances … In its assessment of whether a BI insurance policy is responsive to the outbreak of Covid 19 and interference and / or interruption to insureds’ businesses, the Central Bank will monitor and analyse three broad issues:- (i)Cover and (ii) Causation and (iii) Quantum and Claims Handling.

On 5 February 2021, the Central Bank of Ireland issued a press release regarding Business Interruption Test cases. The press release can be found here and notes that insurers should pay the reasonable costs of customers in agreed test court cases that seek to determine issues for wider groups of customers.

Aggregation of Claims      

(Yes/No /NA)

Additional comments, if any.

31

Does the country you are reporting on permit aggregation of claims arising out of a single originating cause? Please give a short description of the legal basis.

Yes

This is done by contract.

If the insurance policy contains an aggregation clause which aggregates claims on either originating cause or events the Irish courts will enforce same.

32

Does the country you are reporting on permit aggregation of claims arising out of a single cause? Please give a short description of the legal basis.

Yes

If the terms of the contract so provide the courts will enforce same.

33

Does the country you are reporting on permit aggregation of claims arising out of a single event? Please give a short description of the legal basis.

Yes

As above.

34

Does the country you are reporting on utilize an accepted test for determining whether claims can be aggregated? For example, does the country you are reporting on apply to four unities test to determine whether aggregation is appropriate? Please give a short description of the legal basis.

No

NA

35

Have courts in the country you are reporting on issued jurisprudence concerning whether insureds can aggregate claims arising out of COVID-19? Please give a short description of the legal basis.

No

The issue has not been determined to date.

36

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether insureds can aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

No

37

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether insureds can aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

38

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether insureds may aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

No

39

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

40

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple properties or business locations arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

41

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple lock-down or stay-at-home orders arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

Yes

This will be a matter of contract. It appears that hybrid wordings requiring restrictions to be imposed by a government body following the occurrence of COVID-19 have been treated by the FSPO as individual events following the FCA test case. In these cases there is no aggregation and each set of restrictions results in a new claim and potentially a new limit of indemnity. 

42

Have courts in the country you are reporting on issued jurisprudence concerning whether cedents can aggregate claims arising out of COVID-19? Please give a short description of the legal basis.

No

43

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether cedents may aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

44

If the answer to the above question is yes, do courts in the country you are reporting about permit cedents to aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

45

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of COVID-19 and aggregating claims.

None we are aware of

Property Damage   

(Yes/No /NA)

Additional comments, if any.

46

Have courts in the country you are reporting on issued jurisprudence concerning whether losses arising from COVID-19 qualify as property damage losses? Please give a short description of the legal basis.

Yes

The issue of whether or not losses arising from COVID-19 qualify as property damage losses was raised in Mr. Justice McDonald’s decision in Headfort Arms Limited (trading as The Headfort Arms Hotel) v Zurich Insurance Plc [2021] IEHC 608. In this case, the Plaintiff argued that “loss” was not confined to physical damage. The policy document defined “Damage” as “loss or destruction of or damage to the Property Insured”. McDonald J concluded that the Plaintiff’s reading of the definition of “Damage” was strained and that “there is nothing in the relevant factual or legal backdrop that supports the interpretation advanced by [the Plaintiff]”. It was held that the definition of “Damage” did not extend to include a temporary deprivation of the property due to the COVID-19 pandemic.

The term "Damage" was also in dispute in the Irish High Court Test Case of Coachhouse Catering Limited (trading as The Old Imperial Hotel) v Frost Insurance Limited (trading as Frost Underwriting, UQuote, Strata) and Zavarovalnica Sava Insurance Company DD. The term “Damage” is defined in the insurance policy in question as “loss or destruction of or damage to property used by the Insured at the Premises for the purpose of the Business”. Judgment was delivered by the High Court in May 2022[3] with the Court finding that the term "Damage" did not include cover for business interruption losses arising from COVID-19 and that in order to trigger cover there had to be physical damage to property.  

47

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether losses arising from COVID-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

No

NA

48

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether losses arising from COVID-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

See above response to question number 46. There has been no decision by the Irish Supreme Court on this point yet.

However it was determined by the Irish High Court that under the Zurich and Zavarovalnica Sava Insurance Company DD policy wordings, losses arising from COVID-19 did not qualify as a property damage loss.

49

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether losses arising from COVID-19 constitute property damage? Please give a short description of the conclusions in such judicial opinions or guidance.

No

NA

50

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of COVID-19? Please give a short description of the conclusions in such judicial opinions or guidance.

NA

NA

51

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of COVID-19 and property damage.

No

NA

II. Exclusions      

(Yes/No /NA)

Additional comments, if any.

52

Has COVID-19 been deemed a “natural peril” in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

No.

As mentioned above, there have been High Court judgments in a number of Test Cases under the CBI Framework.

In the judgments delivered by the High Court to date, the court has not had to address the matter of whether COVID-19 can be deemed a “natural peril”.  As set out above, at the time of preparing this questionnaire, there are High Court judgments pending in other Test Cases which may change this position. 

53

Has COVID-19 been deemed “force majeure” in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

No.

54

Is COVID-19 acknowledged as a notifiable disease in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

Yes.

COVID-19 has been acknowledged as a notifiable disease in Ireland since February 2020.

The Infectious Diseases (Amendment) Regulations 2020 (S.I. 53 of 2020),  inserted a new schedule into the Infectious Diseases Regulations 1981 (“the 1981 Regulations”) which listed COVID-19 as a notifiable infectious disease.

Part IV of the Health Act, 1947 (the “1947 Act”) empowers the Irish Minister for Health to make regulations specifying those diseases which are “infectious diseases” for the purposes of the 1947 Act. Under s. 31 of the 1947 Act, the Minister is expressly empowered to make regulations providing for the prevention of the spread of an infectious disease. A number of diseases are specified in the 1981 Regulations.

55

Is it common for insurance policies issued in the country you are reporting on to include a pandemic or virus exclusion? Please give a short description of the legal basis and common insurance practice.

Prior to the COVID-19 pandemic, it was not common to see pandemic or virus exclusions in a policy unless it was written on an all-risks basis, which would require such exclusions. However, as COVID-19 is a notifiable disease in Ireland many of the wordings were in fact board enough to include cover for it. On renewal, many insurers have chosen to exclude pandemics/notifiable disease cover. It is expected that an Irish court will enforce such clauses but the burden of proof  in establishing the exclusion applies rests on the insurer.

56

Have any courts in the country you are reporting on determined that a pandemic or virus exclusion is void as against public policy in the context of COVID-19? Please give a short description of the legal basis and relevant jurisprudence.

No.

57

Have any courts in the country you are reporting on otherwise determined that a pandemic or virus exclusion is unenforceable in response to COVID-19? Please give a short description of the legal basis and relevant jurisprudence.

No.

58

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of COVID-19 in the context of exclusions.

The decision of the English Courts in the FCA Test Case is a helpful authority from an Irish perspective in regards the interpretation of COVID-19 in the context of exclusions.  It is expected that the findings made by the English Courts in relation to the exclusions contained in certain of the policies it was considering would be followed by an Irish court considering an exclusion with the same or similar wording.

Regulatory Oversight

(Yes/No /NA)

Additional comments, if any.

59

Have insurance regulators in the country you are reporting on issued directives concerning coverage for claims arising out of COVID-19? Please describe the regulations that have been implemented.

On 27 March 2020, the Central Bank of Ireland wrote to the Chairs and CEOs of both life and general insurance firms setting out its expectation of how regulated insurance firms should treat their customers in light of the COVID-19 pandemic.

As set out above, on 5 August 2020, the Central Bank of Ireland published the CBI Framework which aims to facilitate early identification and resolution of issues relating to Business Interruption Insurance.

60

Are regulators requiring or encouraging insurers to provide grace periods to insureds to make payments on premiums? If yes, please give a short description of the legal basis and relevant guidance.

While the Central Bank of Ireland has not explicitly required insurers to provide grace periods, its letter of 27 March 2020 provides as follows:

“All firms need to be sensitive to changes in customers’ circumstances due to the public health measures taken to counter the spread of COVID-19, which have left many in a financially vulnerable situation. We expect you to provide reasonable arrangements to support such customers in their dealings with your firm at this difficult time”.

Government Action      

(Yes/No /NA)

Additional comments, if any.

61

Has the government in the country you are reporting on implemented relief measures for losses sustained as a result of COVID-19?

Yes

Yes, the Irish Governments introduced a number of COVID-19 Income Support Schemes to provide financial support to businesses and employees affected by the COVID-19 crisis. These supports are available to a range of sectors and are not specific to the insurance industry.

62

If the answer to the above question is yes, are the relief measures available to both individuals and businesses?

Yes

Yes, there are relief measures available to both individuals and businesses.

63

Briefly describe the types of relief measures available to individuals and businesses.

The Irish Governments’ COVID-19 Income Support Schemes include but are not limited to the following:-

Income supports

  • Employment Wage Subsidy Scheme: The Employment Wage Subsidy Scheme, provides a flat-rate subsidy to qualifying employers.
  • COVID-19 Pandemic Unemployment Payment: The Pandemic Unemployment Payment is available to employees and the self-employed who lost their job due to the COVID-19 pandemic. 
  • Short-time Work Support: Employees of businesses that needed to reduce hours or days worked could avail of the Short-time Work Support.

Loans, grants, vouchers and schemes

  • COVID-19 Credit Guarantee Scheme: The COVID-19 Credit Guarantee Scheme facilitates up to €2 billion in lending to eligible businesses. Loans under the Scheme range from €10,000 to €1 million, for terms of up to five and a half years.
  • COVID-19 Business Loans: COVID-19 Business Loans up to €25,000 are available through Microfinance Ireland with zero repayments and zero interest for the first 6 months.
  • COVID-19 Working Capital Scheme: The SBCI COVID-19 Working Capital Scheme for eligible businesses supports loans from €25,000 up to €1.5 million (first €500,000 unsecured) with a maximum interest rate of 4%.
  • The Sustaining Enterprise Fund: The fund is operated by Enterprise Ireland with amounts between €100,000 and €800,000 available to eligible companies who have been negatively impacted by COVID-19. The fund includes a 50% non-repayable grant element, up to a limit of €200,000.
  • Accelerated Recovery Fund: The fund is a fund designed to provide support to Irish companies seeking to adapt their operations and business models in order to remain competitive and return to growth following the effects of the pandemic
  • Business Resumption Support Scheme: The Business Resumption Support Scheme (BRSS) is available to eligible businesses who carry on a relevant business activity. Eligible businesses can make a claim to Revenue for a payment known as an Advance Credit for Trading Expenses (ACTE).
  • Pandemic Stabilisation and Recovery Fund: The Ireland Strategic Investment Fund focuses on investment in medium and large scale enterprises in Ireland through a Pandemic Stabilisation and Recovery Fund. The fund, worth up to €2 billion, makes capital available to medium and large enterprises on commercial terms.
  • COVID Restrictions Support Scheme: The COVID Restrictions Support Scheme (CRSS) offers support to businesses forced to close or trade at significantly reduced levels as a result of restrictions imposed on them in response to COVID-19. Eligible businesses can make a claim to Revenue for ACTE.
  • Enterprise Support Grant: The Enterprise Support Grant provides business owners with a grant of up to €1,000 to restart their business which was closed due to the pandemic. 
  • Trading Online Voucher: The Local Enterprise Office Trading Online Voucher scheme is a government grant, designed to assist small businesses with up to 10 employees. It offers financial assistance of up to €2,500 along with training and advice to help businesses trade online. Businesses that have already received a Trading Online Voucher can apply for a second voucher, where upgrades are required.
  • COVID-19 Business Financial Planning Grant: The COVID-19 Business Financial Planning Grant, worth up to €5,000, is designed to help eligible companies to develop a robust financial plan, including the preparation of documentation required to support applications for external finance from banks and/or other finance providers. 
  • E-merge programme: InterTradeIreland’s E-Merge programme provided £2,500 / €2,800 fully-funded consultancy support to help businesses develop online sales and eCommerce solutions during the pandemic.

Code of Conduct for commercial rents: A voluntary Code of Conduct between landlords and tenants for commercial rents has been developed to facilitate discussions between landlords and tenants impacted by COVID-19.

 

[1] Regina Fur Co Ltd v Bossom [1958] 2 Lloyd’s Rep. 425 (CA) at 428, Col.2, per Lord Evershed MR.

[2] Mason v Harvey (1853) 8 Exch. 819.

[3] [2022] IEHC 306