Publicans’ representative bodies LVA and VFI have slammed insurers who are refusing to honour the ‘Business Interruption’ cover for pubs who have been forced to close.

The bodies have received confirmation from Allianz and FBD that they will not be providing this cover.

“This is a disgraceful decision by the two insurance providers,” said LVA’s Donall O’Keeffe. “At a time of national crisis, with the pub sector on its knees, these insurers have spurned us in our time of need and are refusing to play their part in this emergency situation.

VFI’s Padraig Cribben stated: “This 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.

“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. We will also be seeking the government request to close the pubs to be officially mandated in law.

In Association with

“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.”

Brokers Ireland director general Cathie Shannon (pictured) urged government to convene a meeting of insurance company CEOs to explore an industry-wide response to the Covid-19 crisis.

Shannon said an effort should be made to bring clarity to the situation for policyholders and to explore all possible means to address the unprecedented situation that many people, particularly businesses, now find themselves in.

“While businesses forced to close as a result of the pandemic may not have specific cover for such, some will have clauses that in certain circumstances may cover notifiable human infectious or contagious disease, which may be contingent upon a government decision to close,” she said.

“We would encourage insurance companies to be flexible around coverage decisions taken, particularly given that businesses are being responsible in doing the right thing to protect consumers and staff, and also those businesses that are forced to close without such a government declaration because business had all but dried up.

“The government should now consider exploring with Insurance Company CEOs how the insurance companies can take the lead in demonstrating corporate social responsibility during this unprecedented crisis,” Shannon added.

Fianna Fáil TD Robert Troy said most SMEs that have Business Interruption cover are being told they are not eligible to compensation because they were not legally forced to close by the government, or because an employee had not contracted the virus on their premises.

SMEs with Infectious Disease cover are being told a pandemic is not included or Covid-19 was not listed on their policy.

“Businesses with legitimate policies are being refused cover for ridiculous reasons such as the technicalities of the government’s closure request, because they were proactive in protecting their staff and did not wait until one was infected or because Covid-19 is not listed as an infectious disease,” said Troy.

“These excuses are disgraceful, and the insurance companies and its representative body needs to address them.
“While I understand this is also unprecedented for the insurance industry and they can’t cover all loss of earnings, they do have a duty to pay out to those with eligible policies and to offer some support to other SMEs by potentially suspending premiums while businesses are closed.

“If this matter is not dealt with shortly, SMEs will be forced to face the reality that they may not reopen," Troy added.

SME Task Force

Senator Pádraig Ó Céidigh has repeated his call for Leo Varadkar to establish an SME Task Force to tackle the catastrophic coronavirus fall-out faced by small and medium sized businesses.

Senator Ó Céidigh said current government initiatives and supports are of very little benefit to SMEs and their employees.

“Businesses rely on cash flow. If there is more money coming in than going out, then a business is in a positive situation, and has a good chance of survival. Therefore, we need a cash flow/liquidity solution to help SMEs get beyond this current situation,” he said.

Senator Ó Céidigh wants the Central Bank to modify rules on pillar banks immediately to allow them the flexibility that is essential to support businesses. Ó Céidigh wants banks to:

• Provide soft loans and overdrafts to SMEs with immediate effect.

• Provide a full moratorium for all business loans for at least 12 months.

• Suspend covenants on existing loans.

• No personal guarantees – and provide a State Loan guarantee for loans up to €2m

• Stop selling on SMEs assets (distressed) without consent of the business owner

• Place a moratorium on mortgages.

The aviation entrepreneur also wants government to:

• Reduce VAT rate to 9% across the board until year end.

• Reduce rates by 50% to year end.

• Eliminate USC immediately.

He added: “While I welcome the initiatives recently published by the Revenue Commissioners, I believe that they should introduce greater flexibility with regards to the current deadlines and related penalties.

“Most accounting and tax firms’ staff are working remotely, and as such significant delays will be encountered with regards to making tax returns, filing of accounts, completing audits etc.”

Rates Relief

Dublin Chamber has called for relief from commercial rates for businesses struggling with the impact of the Covid-19 pandemic.

The organisation, which represents 1,300 businesses in Dublin, said that targeted measures are urgently needed to help companies in distress, and called on government to commit to support Local Authorities in dealing with the temporary shortfall.

Director of Public and International Affairs Aebhric Mc Gibney said: “The business community is being massively impacted by the Covid-19 pandemic, with the food and hospitality and the retail and wholesale sectors particularly badly affected.

“There are certain kinds of business for which commercial rates are a significant portion of their cost base, and we need to see relief in this area if these businesses are to survive and to minimise job losses.

“We have received a lot of stark feedback from our member companies over the past week, with many warning of present or imminent cashflow problems and the likelihood of large-scale job losses.

“To protect vulnerable companies and the livelihoods they support, we are calling on Government to implement a targeted relief from commercial rates for the duration of the isolation period.”

SIPTU general secretary Joe Cunningham called on Leo Varadkar to introduce an extensive wage subsidy scheme to keep employees in work during the Covid-19 emergency.

Cunningham also called for an immediate increase in Jobseekers’ Benefit and other payments such as the Pandemic Unemployment Payment to €305 per week.

The trade union leader also said there should be a moratorium on payments, rents and utility bills for three months.

“The best way to deliver a comprehensive programme of economic support and social certainty is for trade unions, employees and the State to agree a temporary national emergency programme,” Cunningham added.

Keynesian Response

KBC Bank economist Austin Hughes said Keynesian type counter-cyclical measures are required from government to significantly offset income and employment losses.

Hughes added: “The necessary fiscal action will entail a large and manageable hit to the public finances. In the current circumstances, a policy response scaled on what is necessary but proves not to be sufficient may be much more costly in terms of lasting economic losses than one which is seen to be sufficient but proves to be more than is necessary.

“As modified domestic demand amounts to around €50 billion per quarter, it would seem possible that the fiscal cost could readily rise to four or five times the €3 billion package initially indicated by the government.

“At current interest rates, and assuming ongoing support from ECB bond purchase programmes, that might add a modest €40-50 million to annual debt service costs, which even in very narrow accounting terms should be seen as a very limited cost to preserve livelihoods that might otherwise not contribute to tax revenues in coming years.”

In the House of Commons today, Tory MP Greg Clark, former business minister, noted that all employers have an account with the Revenue Commissioners to pay tax for employees through Pay As You Earn.

"The monthly wage bill is known to HMRC, " said Clarke. "Instead of firms paying PAYE to the government, that flow should now be reversed with the nation paying the wages of people for the next weeks if, and only if, they continue to employ their staff.

"Separate arrangements would need to be made for the self-employed, but at a stroke this would save people’s jobs, save businesses and put an immediate end to the risk of contagion and help save the economy."

Clarke's suggestion echoes similar calls from the Confederation of British Industry.

Artists Relief Fund

Meanwhile, the Civic Theatre in Tallaght, Co. Dublin, has raised c.€24,000 since it launched its online fundraiser for artists five days ago, but the demand for support has completely outstripped the amount available.

A huge number of music and arts events have been cancelled due to the pandemic, leaving artists without work and struggling financially.

The Journal of Music reports that over 400 submissions for help were received in nine hours when applications for the Civic fund opened on St Patrick’s Day. The Civic Theatre says it would require over €200,000 to assist every artist who applied. The Civic has given all the money raised so far to the first 50 artists who applied to help pay bills.

The Civic is now launching a second round of fundraising with the revised target of €50,000.

Marketing manager Niamh Honer commented: “Applications were received from choreographers, painters, actors, musicians, opera singers, directors, writers, producers, stage managers, theatre technicians, designers, singers and songwriters.”

To donate to the fund, see here.