The COVID-19 pandemic and business interference insurance …

Many business operators had taken out business interference insurance and claimed on those policies after they suffered loss because of lockdowns imposed by state governments during the COVID-19 pandemic. The insurance companies are denying liability and it is now for the courts to determine the issue of responsibility.

The most recent decision followed proceedings brought by the owner and operator of the Vanilla Lounge cafe. In this action, the Federal Court was asked to answer a specific question: can liability be excluded (under the particular insurance policy) if the claim arises directly or indirectly or contributed by a human disease specified in a declaration of a human bio security emergency made under the Biosecurity Act 2015 (Cth.). The insurance company argued that the reason for the lockdown (and therefore the loss) was the state governments declaration under the state law not the declaration made by the Commonwealth government. The Judges answer was “no”, that liability cannot be excluded.

It is understood that leave will be sought to appeal the decision to the High Court.

There have been other decisions that similarly are opening the door for business owners to claim on their policies.

For more information about your rights, contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jackasonassoc.com.au