Billions of dollars in COVID-19 insurance claims hanging in High Court balance

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Mr Berrill, of Berrill & Watson, said: “Insurance companies say, ‘It’s the fine print – that’s actually what we meant,’ which is ironic to say the least.

“I’ve been an insurance lawyer for 25 years fighting insurance companies where they try to trust the fine print, and here the boot is on the other foot. “

His company has filed 30 complaints with the Australian Financial Complaints Authority from companies whose stop requests have been denied. The regulator said it had received 163 complaints nationwide on the matter.

Melbourne’s closures have left the streets empty and businesses closed.Credit:Eddie jim

The Insurance Council of Australia brought two of these claims – one from a trailer park in Tamworth and the other from a health food store in the Melbourne suburb of Maribyrnong – to the Court of call from NSW as a test case, hoping for a fatal blow.

The court ruled that words were words and that the exclusion clause was not animated because COVID-19 was not declared under the old legislation.

So important was the Court of Appeal’s decision, the council said in its initial High Court application, that insurer IAG suspended operations and embarked on a $ 750 million fundraiser in forecast of an increase in claims.

AGI chief executive Nick Hawkins admitted the terms of the policy were

AGI chief executive Nick Hawkins admitted that the wording of the policy was “not as clear as it could have been.”Credit:Dominique lorrimer

Part of the counsel’s argument in the High Court is that because the policies included “subsequent amendments” in reference to the Quarantine Act, this also meant a repeal and replacement of the legislation.

A spokesperson for the Insurance Council said that even before COVID-19, losses from the pandemic were considered rare and expensive.

“The nature of the risk means that it is, by most measures, uninsurable. The global reinsurance industry has deliberately and clearly excluded pandemic-related losses from most policies on this basis, ”the spokesperson said.

A clear framework did not yet exist to allow the industry to cover the risk of a global pandemic without the risk of bankruptcy of insurance pools, the spokesperson said.

Masked Melburnians at South Melbourne Market after the recent foreclosure ended.

Masked Melburnians at South Melbourne Market after the recent foreclosure ended.Credit:Wayne taylor

Kathryn Emeny, a partner at Warrnambool-based Maddens Lawyers, said insurers had “pushed on hold or denied” many claims for blockage losses.

“It is particularly unfair for an insurer to seek to rely on outdated legislation to deny claims,” Ms. Emeny said.

Melbourne couple Travis and Liv Jones, who founded and run RBT gyms, have had their claim to QBE rebuffed, but their policy contains the definition of the Quarantine Act.

Ms Jones said her business lost $ 4 million last year and the claim, which is significantly less, would help eradicate their losses.

RBT Gyms owners, husband and wife Travis and Liv Jones.

RBT Gyms owners, husband and wife Travis and Liv Jones. Credit:Joe armao

“Whether or not this is a viable option for insurance companies around the world… it doesn’t matter when right now it’s the coverage we had, it’s the coverage we signed on,” Ms. Jones said. .

“We purchased these additional packs to make sure our business was protected from business disruption. We did the right thing. “

Amy Wang, owner of Summerfield Estate on the Mornington Peninsula, said businesses should be entitled to at least one credit from insurance companies for the period in which they have been forced to close.

She said insurance companies were at very little risk during business shutdowns, even though they still paid for insurance, which she said cost more than $ 14,000 a year.

“During the lockdown, you can’t have weddings and you can’t open the door for people to take a site tour,” Ms. Wang said.

In Britain, a similar test case was launched by its corporate regulator and a first decision was mostly in favor of policyholders.

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Mr Berrill said a High Court ruling in favor of business would not mean people would be immediately paid because of the complexity of policies having to prove that an outbreak has occurred in or within a certain radius of premises and a loss has occurred.

“Businesses are stuck in the middle of a big legal battle, but in the meantime they should get advice on filing claims and not wait,” he said.

A second test case, also initiated by the Insurance Board, is before Federal Court to decide issues such as the definition of an epidemic. An individual case brought by Melbourne sites, including the St Kilda Hotel esplanade, has also been filed in the Supreme Court of Victoria.

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