In our July 21 update we reported that an upcoming ‘Second Test Case’ scheduled for October 21 in the Federal Court, would determine whether Businesses could rely on ‘other Policy triggers’ to make a Business Interruption claim under their Business Insurance Policies. This followed the earlier determination that Insurance companies could not exclude Covid-19 related claims based on their ‘Quarantine Act 1908’ exclusion.
What are the Latest Developments?
The Federal Court considered nine test case scenarios bought by Insurers. The Court found in favour of the Insurers, in all but one of the cases and there are several issues with the one remaining case, which means it is potentially also unlikely to succeed.
You can follow the link to the Insurance Council of Australia Website, to read a full summary of the details of the decision by the Federal Court: https://insurancecouncil.com.au/bi-test-cases/
So What Happens Now?
A final appeal brought by Policyholders to the Second Case Decision has been scheduled for hearing on November 8, 2021. It is anticipated that The outcome of that appeal should provide clarity for Businesses and their Insurance Brokers, to assess with some degree of confidence, whether or not a particular Business will be able to make a claim under the Business Interruption section of their Policies and under what circumstances.
What Does This Mean for Your Potential Business Interruption Claim?
This means that once the final determination has been handed down regarding the current test cases, your Coastsure Insurance Broker will be able to provide more informed guidance, in respect to the likelihood of making a successful Business Interruption insurance claim, in your particular circumstances.
What Do You Need to Do?
In anticipation of the Courts providing further clarity on this issue, Coastsure is progressively reaching out to our clients who have the Business Interruption cover under their Business Insurance Programs, in order to provide some initial guidance, regarding the preparation of their potential claim.
In the meantime, we encourage clients who have questions in regard to their eligibility to make a Business Interruption claim to contact their Coastsure Insurance Broker to discuss their enquiry. However at this stage, no immediate action is necessary until the final determination is handed down by the Federal Court, which will clarify the circumstances under which a Business Interruption claim may be payable under Policies as a result of the Covid19 crisis.
Our next update will be November following the Federal Court handing down it’s final decision from the appeal. We will provide a full summary of the determination from the scheduled hearing and guidance on the next step toward resolution.