What has happened so far?
Since March 2020 many businesses and commercial properties have been effected by loss of profits and rental income from enforced COVID-19 shutdowns and restrictions.
Generally insurers had previously taken steps to reduce their exposure to pandemics in the early 2000’s and were relying on exclusions to avoid claims.
However, some insurers did not amend their wording from the Quarantine Act 1908 to the more recent Biosecurity Act 2015 and this has left them potentially exposed to claims.
Currently, there are several cases being brought against insurers challenging the declined claims, particularly in reference to those insurers who had not amended their exclusions to the Biosecurity Act 2015 and we are waiting for clarification of these proceedings.
What happens next?
Because of the High Court’s decision insurers may not be able to rely on references to the Quarantine Act to deny liability in policies written in the same terms as the policies considered in the first test case.
However, there are further interpretations of aspects of business interruption policies that need to be resolved to establish whether policyholders will ultimately be covered.
If your business or commercial property suffered a loss of income as a result of closures or rental losses, you may potentially have a claim. We recommend that you lodge a claim and it will be assessed in accordance with the policy terms and your circumstances.
The outcome of the court cases still has some way to go and we cannot predict the outcome, but in the meantime if you have any questions relating to this please contact us, 08 9349 7900, to chat with your broker.