Insurance Australia Group (IAG) has formally requested a trading halt to enable the company to consider the impact of the judgment handed down yesterday by the New South Wales Court of Appeal in relation to business interruption insurance arising from COVID-19.
The insurer has sought the halt so that it can assess the financial impact of the judgment and its capital requirements.
The judgment rejected the industry’s argument that policies should not cover COVID-19 pandemic-related losses, and comes after insurers – such as IAG, QBE, and Suncorp – repeatedly insisted that pandemic exclusions should stand. The court’s decision could leave many insurers facing the prospect of paying out thousands of pandemic-related business interruption claims.
“IAG notes the judgment handed down yesterday on the BI test case and is in the process of reviewing it,” a spokesperson for the company told Insurance Business. “We will provide an update in due time.”