Appeals start in COVID-19 BI test case at Federal Court

Appeals start in COVID-19 BI test case at Federal Court | Insurance Business Australia

Appeals start in COVID-19 BI test case at Federal Court

Appeals are due to get underway this morning in the second COVID-19 Business Interruption (BI) test case. A statement from the Federal Court said the hearing in these matters will begin at 11 am AEDT and is scheduled to last seven days. The hearing will be publicly live streamed.

The appeals will be heard by three justices: Mark Moshinsky, Roger Derrington and Craig Colvin. A document released by the Court lists the six matters due to be heard this week. Two of the BI insurance claims matters involve Chubb and two others involve Insurance Australia Limited. QBE and Swiss Re International are each involved in one matter.

The subject of these appeals is a judgement delivered in early October by Judge Jagot. Justice Jagot ruled that in nine out of 10 cases the BI insuring clauses did not apply to pandemic coverage.

In the case of Meridian Travel in Melbourne, where the court found that coverage was triggered, the judge said there were substantial issues concerning whether the policyholder could prove any relevant business interruption.

Read more: AFCA could order insurers to pay COVID-19 BI insurance claimants $500,000 each

The judgement also said that government subsidies like JobKeeper would be taken into account in assessing any losses.

Industry experts regarded the judgement as a win for insurance companies that could mean insurers avoid paying out billions of dollars for BI insurance claims.

The Insurance Council of Australia (ICA) has said that this case’s expedited timetable will see proceedings in the Federal Court concluded by the end of 2021 or soon afterwards.

The ICA has said that insurers, including those not directly involved in the court proceedings, have committed to applying the reasoning of the final judgments of the test cases in an efficient, transparent, and consistent way when assessing claims.