Two of Australia's remaining COVID-19 business interruption class actions are over, after the Full Federal Court ruled on August 5, 2026, that the group format was not an efficient way to resolve the claims.
The businesses behind the actions had brought class actions against QBE and a group of Lloyd's underwriters over pandemic losses, seeking to press their cases together. A judge had already ended four such cases in December 2024. Only the actions against QBE and the Lloyd's underwriters were appealed; two others, against Insurance Australia Ltd and The Hollard Insurance Company, were not.
The outcome was mixed on the law but clear in result. The Full Court agreed the earlier judge had erred by deciding the applications on a different set of questions from the ones the businesses said mattered. But the appeal judges re-ran the analysis themselves, using the businesses' preferred questions, and reached the same conclusion. Leave to appeal was granted; the appeals were dismissed with costs.
Importantly, the court did not decide whether any policy actually covers these losses. It ruled only on how the claims should proceed - not on the merits of cover.
What drove the result was low take-up. QBE had about 36,000 insureds with relevant policies but only 580 claims by July 2024, more than 500 of them tied to hybrid clauses carrying a radius requirement. Lloyd's had 77 relevant policies over 110 locations and just 10 claims, all of which were declined. The court declined to turn itself into an "insurance claims handling clearing house."
The questions the businesses raised turned on causal wording - whether cover for interruption "as a result of" an outbreak within a set radius required that outbreak to be the "proximate cause" of the loss. One QBE hybrid clause covered loss "incurred as a result of ... the closure or evacuation of the whole or part of the premises by an order of a competent government, public or statutory authority as a result of ... the outbreak of a notifiable human infectious or contagious disease occurring within a twenty (20) kilometre radius of the premises." With 28 QBE wordings across four clause types, the court found little that could be answered on a common basis.
Its message to insureds was direct: handling individual claims "is what insurers do, day in, day out." Policyholders were pointed back to QBE's and Lloyd's internal complaints processes, and then to the Australian Financial Complaints Authority, which can award up to $631,500 for complaints lodged on or after January 1, 2024. An accepted AFCA determination is binding, and any insured still dissatisfied could pursue the claim on their own.
