Australian appeals court rules insurers must pay COVID-19 claims
The New South Wales Court of Appeal in Sydney ruled against insurers in a test case for COVID-19 claims that was initiated by the Insurance Council of Australia and Australian Financial Complaints Authority.
The test case was launched to resolve the uncertainty surrounding potentially outdated wording in pandemic exclusions.
Several insurers in Australia have denied COVID-19-related business interruption claims on the grounds that their policies specifically excluded disruption caused by “quarantinable diseases.” However, the policies referred to the Quarantine Act which had been repealed in 2015 and replaced with the Biosecurity Act.
Despite the insurers arguing that the intent of the clauses was clearly to exclude a pandemic even after amendments in the Biosecurity Act, the court said that COVID-19 is not “declared to be a quarantinable disease under the Quarantine Act 1908 and subsequent amendments,” and “accordingly was not excluded from the disease benefit clauses.”
In a statement, the ICA said that it will urgently review the determination and specifically the grounds on which it could seek special leave to appeal against the decision to the High Court of Australia.
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