Insurance market has been the ‘fall guy’ of the Covid-19 pandemic

The insurance market has been labelled as the “fall guy” of the Covid-19 pandemic as frustrated policyholders fail to align their claims expectations with the insurance sector’s purpose and coverage remits said Toby Vallance, a partner at law firm DAC Beachcroft who deals in marine insurance.

Speaking on the debate surrounding coronavirus-related business interruption (BI) claims, Vallance told Insurance Times: “I feel for the customers [of] the insurance market because these are incredibly difficult times and we’re looking at a recession, so I understand that people are looking at all possible avenues, but I also think the insurance market has been a bit of a fall guy for what are the expectations of what the insurance market will cover and I don’t think there’s been a fair review.

“The insurance market has covered a lot of Covid-related BI claims, but the ones where they aren’t have been picked upon; the insurance market will be doing a lot going forward in other areas, not my areas of specialism, but directors’ and officers’ (D&O), there’ll be [an uptick] in relation to businesses that will struggle and perhaps go under in the next year or so [as well as] the consequences of that.”

Industry support

Vallance emphasised that the insurance industry as a whole “needs to be supported rather than just attacked” because of its “fundamental” role in the broader economy and society.

He continued: “There is certainly a question about people understanding what’s covered and also what the insurance industry is here for. It carries out much wider support for business and society in general than just unfortunate and difficult incidents such as Covid-19, and it’s important to remember that.

“The insurance industry is fundamental, so it needs to be supported rather than just attacked.”