Rental Property Decision Reference 2022-0257

• Case Outcome: Rejected
• Subject Matter: Rental Property
• Reference: 2022-0257
• Date: 29 July 2022
• Finantial Sector: Insurance
• Conducts Complained Of: Rejection of claim

Decision Ref:

2022-0257

Sector:

Insurance

Product / Service:

Rental Property

Conduct(s) complained of:

Rejection of claim

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant, a landlord, held a Property Owner’s Insurance Policy with the Provider.

The policy period in which this complaint falls, is from 24 July 2019 to 23 July 2020.

This complaint concerns the Provider’s declinature of the Complainant’s claim for loss of

rental income as a result of his tenants’ temporary closure, due to measures imposed by the

Government to curb the spread of the coronavirus (COVID-19).

The Complainant’s Case

The Complainant submitted a claim to the Provider in June 2020 for the loss of rental income

because his tenants, which trade as a public house and separately as a restaurant, were

unable to pay the Complainant rent, due to the closure of their businesses for a period, as a

result of measures imposed by the Government to curb the spread of COVID-19.

In making his claim, the Complainant notes that Section 2, ‘Rental Income’, of the applicable

Property Owner’s Insurance Policy Document provides at pg. 16 that:

“The Underwriters shall indemnify You under this section in respect of Damage

resulting from interruption of or interference with the Business during the Indemnity

Period following:

a) any human infectious or human contagious disease an outbreak of which the

local authority has stipulated shall be notified to them manifested by any person

whilst in the Premises or within a 25 miles radius of it …”

- 2 -

/Cont’d…

The Complainant says that as the insured premises are in Dublin City Centre, there were

multiple cases of COVID-19 within a 25 miles radius, including a number of persons both

employed and occupying the insured premises who were diagnosed with COVID-19.

Following its assessment, the Provider’s Claim Administrators wrote to the Complainant on

16 July 2020 to advise that it was declining indemnity, a position it reiterated in its letter to

the Complainant of 9 October 2020.

The Complainant submitted a complaint to the Provider in relation to the claim declinature

and following its review of the matter, the Provider wrote to the Complainant’s

Representative on 29 December 2020 to advise that it was standing over its previous

decision to decline indemnity. The Provider has since maintained this position.

In its letter to this Office dated 21 January 2021, the Complainant’s Representative submits:

“… that the losses sustained by [the Complainant] are covered under the terms of the

policy …”

As a result, the Complainant seeks from the Provider to admit and pay his claim for loss of

rental income as a result of his tenants’ temporary closure due to measures imposed by the

Government to curb the spread of the COVID-19. In this regard, in its letter to this Office

dated 16 November 2021, the Complainant’s Representative advises that:

“[The Complainant’s] claim…for the appropriate quarters from the 1st of April 2020

to the 30th of June 2021 in relation to the insurance claim now totals €178,125.00”

In its letter to this Office dated 14 December 2021, the Complainant’s Representative

confirmed that the Complainant, on a strictly without prejudice basis, settled his High Court

proceedings against his tenants and that this involved a write-off of a portion of the rent

arrears.

The Provider’s Case

Provider records indicate that the Complainant submitted a claim to the Provider in June

2020 for the loss of rental income when his tenants, which trade as a public house and

separately as a restaurant, were unable to pay the Complainant rent, due to the closure of

their business for a period, as a result of measures imposed by the Government to curb the

spread of COVID-19.

Following its assessment, the Provider’s Claim Administrators wrote to the Complainant on

16 July 2020 to advise that the Provider was declining indemnity, as follows:

“… Unfortunately, your policy does not provide cover in this instance as the loss that

is being claimed for is not the result of a specific occurrence or outbreak of COVID-

19.