Business Interruption Insurance Claims & COVID-19 Update

A significant update came in the Business Interruption Insurance Claims & Covid-19 Test Case on Friday, 25 June 2021.

Insurers will not be able to rely on the Quarantine Act exclusion clause in Business Interruption Insurance Policies to deny liability for claims in relation to Covid-19.

Vincents are happy to review all policies free of charge to consider how the outcome of this Test Case applies to your business and your ability to make a claim.

What you need to know

The Insurance Council of Australia estimates this decision may impact 250,000 Policyholders with losses of $10 billion. Policies issued by every major insurer in the market have been found to contain the relevant clause.

The High Court has denied the special leave application to appeal the First Test Case, where it was determined the Biosecurity Act 2015 was not a subsequent amendment of the Quarantine Act 1908; and that COVID-19 was never declared a quarantinable disease, and therefore was not excluded. More details on this decision can be found here.

A Second Test Case is underway to determine the meaning of policy wordings in relation to the definition of a disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate, as well as policies that contain a hybrid of these type of wordings, and how JobKeeper and other benefits will be accounted for. This will further clarify the parameters for businesses to make a claim.

The Federal Court has expedited the matter with the trial expected to take place in late August 2021, and any appeal expected to be dealt with by the Full Court of the Federal Court in November 2021.

If you hold a Business Interruption Insurance Policy, the Insurance Council of Australia is encouraging policyholders to contact their insurer or broker about lodging a claim.

What should you do next

  1. Obtain a copy of the insurance policy and schedule (your insurer or broker can provide a copy). Contact us to review the policy free of charge.
  2. Notify your insurer or broker of your claim.
  3. Use our online calculator to consider your potential claim.
  4. Document your losses (download our free checklists).
  5. Seek independent advice and expert assistance.

How we can help

Vincents are happy to review all policies free of charge, to consider how the outcome of this Test Case applies to your business.

Further information and checklists about our Business Interruption insurance claims services can be found here.

Download your FREE copy of our Business interruption insurance checklists

Checklist for initially after the damage event

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    Checklist for further information to quantify and prepare a claim

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      Want to know more?

      If you would like to find out more about how this could impact your business, please contact Natasha Milne, our Forensic Services Director, for assistance.

      An Important Message

      While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents.  Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

       

       

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