Insurers brace for business interruption class actions

Insurers brace for business interruption class actions | Insurance Business

Insurers brace for business interruption class actions

With insurers losing out in the COVID-19 business interruption (BI) test case in Australia, law firms are poised to launch class actions on behalf of policyholders who have suffered BI as a result of the pandemic.

Josh Mennen, a principal lawyer in the insurance practice at Maurice Blackburn, said the law firm was “very conscious of the serious issues involved in the findings of the business interruption test case and will have more to say about it shortly.”

He told The Australian: “This is not a silver bullet. Every claim will turn on its own facts and policy wording. The most significant is the requirement for the outbreak to be within a particular radius, and also that the closure or evacuation be by order of a public authority.”

Meanwhile, Gordon Legal, along with Berrill & Watson, is gathering claimants for a possible class action to resolve disputes with insurers over coverage.

Gordon Legal partner Andrew Grech said he hoped insurers would start assessing claims on their own merits following the decision handed down by the New South Wales (NSW) Court of Appeal.

“But it does appear that they intend to take the view that they should instead engage in a very technical legal battle. That will be very troubling to many other insured customers who need the help now, not in 12 months or a few years’ time,” Grech told The Australian.

Berrill & Watson director John Berrill added: “One way they’re going to play out is there’s going to be another test case. It’s a test case by test case drip-feed. One way to bring this all together and deal with all these issues is to do a class action.”