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COVID-19 Claims Update: Second BI Test Case Hearings Conclude

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by Luke Stratford , 

Head of Claims Solutions, Marsh Advisory, Property Risk

09/28/2021 · 2 minute read

The Federal Court hearing of the Insurance Council of Australia’s second test case concluded in the week of 13 September after eight days of hearings.

The second test case incorporated consisted of nine small business claims disputes lodged with the Australian Financial Complaints Authority (AFCA), from a range of business sectors. The case seeks to provide greater clarity in regard to insurance policy response to COVID-19 related claims, such as: 

Meaning of policy wordings in relation to:

  • The definition of a disease
  • Proximity of a COVID-19 outbreak to a business
  • Prevention of access to premises due to a government mandate 
  • Hybrid policies of these types of wordings.
  • How government support, like JobKeeper, should be treated.

Another test case involving QBE and a travel company was concurrently heard. This case seeks to clarify whether section 61A of the Property Law Act 1958 (VIC) has effect to substitute the Biosecurity Act 2015 (Cth) which replaced most of the repealed Quarantine Act 1908 (Cth). 

The Federal Court has confirmed that any appeal is to be heard by the Full Court in November 2021.

The Federal Court has established a publically accessible page to view documents related to these test cases at their COVID-19 Business Interruption Insurance Test Cases online file. 

What are the steps you can take now?

Even with the delay in resolving the outstanding test cases, rather than wait, we recommend that insureds who have yet to lodge a claim review their position, obtain advice from their insurance and risk advisors and legal advisors, and consider lodging a claim with insurers. 
 
In the meantime, insureds should ensure they collate operational and financial data, in addition to other documentation, to support their claim, to avoid loss of critical information or further delay. Refer to AFCA’s information sheet "Establishing business interruption loss due to COVID-19" which identifies some practical steps that may assist in supporting a COVID-19 claim. 

Need help?

If you have any questions regarding the developments of the business interruption test cases in Australia, or you are considering making a claim, please contact your Marsh Client Executive or contact our claims team here.

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