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If your business has suffered financially during the pandemic, and you have business interruption insurance, you may be interested to follow the progress of a test case launched through the NSW Supreme Court system by the Insurance Industry and Financial Services Ombudsman.
A number of our clients have advised their claim for business interruption insurance has been rejected because of the wording in their policy relating to references to the Quarantine Act of 1908 and not the Bio Security Act of 2015.
A Court interpretation will provide direction for insurers, brokers and clients as to whether a claim would be successful.
The ramifications for insurance claims in Australia could well amount to hundreds of millions of dollars in payouts if the test case is upheld by a Court.
The case will most likely be strenuously defended by the insurance companies and there will be significant time taken for the matter to work its way through the Court system.
If you have not already contacted your broker or insurance company in respect of a business interruption claim you should do so immediately to at least register your interest and lodge a claim under your policy. You may also want to lodge a complaint with the Australian Financial Complaints Authority.
This will be a high stakes test case for the insurance industry and will have major ramifications for the business community if the case is successful.
We will monitor progress of the test case through the Court system however in the meantime if you wish to discuss the terms of your business interruption insurance, one of our commercial lawyers will be able to assist you.
It is important to seek specific advice regarding your circumstances as this fact sheet provides general information only and does not constitute legal advice.
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