16.4.2020 17:08

Submit a claim to your insurer to get an official decision – “we’re probably going to see claims taken to the insurance board”

Some insurers have said that the epidemic cover included in business interruption insurance does not give restaurants the right to a pay-out because of coronavirus restrictions. However, Suomen Yrittäjät encourages entrepreneurs to make claims against their business interruption insurance policies if they have studied the terms and conditions and are not sure they are entitled to payouts.

Insurers’ general guidelines on entitlements are not the same thing as an official decision on an individual claim.

Karolina Katila, a specialist in company law at Suomen Yrittäjät, thinks that a lot of claims decisions will end up in the insurance board.

“We’re probably going to see claims decisions taken to the insurance board, and some of them will even end up in court.”

She encourages entrepreneurs to submit claims against their business interruption insurance policies to get official claims decisions.

“If an entrepreneur doesn’t get an official decision, they can’t appeal that decision. Initial investigation shows that insurers’ terms and conditions vary. Some policies require an official order to have been made about the insured business’s premises. Some policies contain no such condition, though.”

Katila thinks business interruption policies’ epidemic cover is unlikely to pay out, as business interruption policies are poorly suited to this situation.

Finance Finland: wide variation in interruption policies – as a rule, no basis for payouts

Amanda Aalto, legal adviser at the sectoral trade association Finance Finland (Finanssiala ry) agrees with Karolina Katila of SY and thinks policy holders will appeal claims decisions to the insurance board.

“I expect we’ll see people appealing decisions, so let’s wait and see how the insurance board interprets them. The general rule is that business interruption insurance does not pay out in this [coronavirus epidemic] situation. Some insurers may have individual bespoke policies that could pay out,” Aalto says.

Will insurers process claims from the restaurant sector in a certain way because the authorities have ordered their businesses to close?

“As a general rule, no, because insurance terms and conditions apply to all of them. Likewise, insurers inspect policies’ terms regardless of the company’s field. Business interruption policies vary quite a bit between insurers, so you can’t simply say at a general level what a policy will and won’t cover,” Aalto says.

“The terms of epidemic interruption policies generally require an official order to close the premises; the order applies specifically to that location. In this case the closure order would be issued on the basis of the source of an epidemic, such as salmonella, being detected in the restaurant.”

The terms of epidemic cover refer to an official closure of premises for disinfection.

What to do if you receive a negative claims decision

Suomen Yrittäjät asked Fennia, LähiTapiola, OP Pohjola and If for answers on how their policies would cover the sample situations raised in the article.

Suomen Yrittäjät advises you to do the following if you receive a negative claims decision:

If the claims decision was not the one you expected, you should first discuss the grounds for it with your insurer. After this, if necessary, you can contact the Finnish Financial Ombudsman Bureau (FINE), which will advise you and help straighten out problems with your insurer. Your matter might be taken to the insurance board (Vakuutuslautakunta) for resolution. It recommends solutions in insurance disputes. If that does not resolve the matter, you can take your claims decision to court.

Riikka Koskenranta


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