If you have business interruption insurance, now is the perfect time to check your policy to see if you are covered in relation to COVID-19. In a recent test case brought on by the Insurance Council of Australia, many insurance policies still referred to exclusions based upon the Quarantine Act which was repealed in 2016.
Because of this a number of businesses have now been successful in receiving payment for business interruption insurance claims which had previously been rejected or delayed.
The court findings:
With the decision made by the NSW Court of Appeal in HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296, if you've had a claim denied or held-up on the basis of the Quarantine Act exclusion, you now have judicial support to press your insurer to resolve or finalise your claim.
Of course, there may well be other exclusions in your policy, and it will depend on the specific policy wording, however this is seen as a big win for many struggling business owners, relying on Government support and insurance to keep afloat.
The test case was used to decide the issue of whether exclusions referring to the Quarantine Act, which was replaced by the Biosecurity Act could be used to reject claims.
The Court's decision on 18 November was that COVID-19 had not been declared a quarantined disease and there was no basis to deny claims, under policies containing that exclusion. The pandemic was declared a listed human disease under the Biosecurity Act.
Where to from here for your business?
Given the impact on insurers and the volume of likely claims, it is expected that this and other issues arising from business interruption insurance will be played out in the Courts over coming weeks and months.
If you have had a claim rejected or are not sure if you can claim for losses related to COVID-19, contact our experienced team for advice on your rights and what steps you can take to have your claim paid. We're here to help on 1800 650 656.
Angus Edwards | Principal