Business interruption insurance and COVID-19

19 November 2020

Yesterday, a full bench of the New South Wales Court of Appeal unanimously held that that an exclusion in a business interruption insurance policy was not engaged by COVID-19.

The reasoning was based on the policy wording. The reason why the exclusion did not respond is that it was limited to quarantinable diseases under the Australian Quarantine Act 1908 and subsequent amendments. The Quarantine Act 1908 was repealed in 2016 and replaced by Biosecurity Act 2015 (Cth).

The insurer has flagged its intention to appeal the judgment.

According to news reports, many insurers, including Suncorp, QBE, Insurance Australia Group, HDI, Chubb and Lloyds, are all exposed to the judgment.

What you should do:

  • Check your policy wording for reference to the Quarantine Act 1908 (Cth).
  • If your policy wording does refer to the Quarantine Act 1908 (Cth), and you have suffered business loss caused by the consequences of COVID-19, contact Mahoneys for advice on whether you can make a claim.