Business Insurance Claims

COVID-19 led to many challenges for our business customers. If you believe your circumstances entitle you to claim under your Business Interruption (BI) cover then you should consider lodging a claim. You can also find out more information about our claims process or speak to your broker.

Determination of BI claims and resolutions are currently taking longer than expected. Since mid-2021, the Insurance Council of Australia (ICA) has been conducting a series of court ‘test cases’ to clarify the circumstances that would trigger a claim to be paid under BI cover due to COVID-19. For some of our customers, this has meant there has been a delay in reviewing and determining claims. We understand that this may cause concern, so we will try to keep you informed of the ongoing situation.

The first BI test case took place in June 2021. The NSW Court of Appeal found insurers couldn’t rely on pandemic exclusions contained in BI coverage that reference the repealed Quarantine Act 1908 (Cth).

The second BI test case sought to obtain clarity on a number of policy issues such as:

• How the definitions of infectious disease are to be interpreted in policy wordings.
• What constitutes a COVID-19 outbreak?
• How the proximity requirement is to be interpreted.
• The impact of government orders and other mandates.
• Other policy wording matters. 

On 21 February 2022, the Full Court of the Federal Court substantially upheld the conclusions reached by the Federal Court in the second BI test case. Unless this finding is overturned in the High Court (see next steps below), this means that in the factual circumstances set out in test cases, the relevant insuring clauses will not be triggered. This means there may be no cover under the policy for these types of claims.

Next Steps

On 21 March 2022, three special leave applications to appeal the Full Court’s decision to the High Court were filed. The ICA does not anticipate that any decision on the special leave applications will be made for approximately three months from the date the applications were made. If the High Court decides it will hear the appeals, it may be another 12-months before a final decision is made.

We appreciate your patience while these matters are resolved. Clear guidance and agreement by the courts is essential in determining how we will interpret and apply the relevant policy wordings to business interruption claims.

We’re committed to supporting our customers through the claims process, and assessing claims in an efficient manner once the final judgement is received.

Lodging a business interruption claim

You can review the below FAQ for a list of things to consider when completing a claim. Customers can also call our claims line on 131 846.

Each claim will be reviewed subject to your BI insurance cover. There must be a loss that is covered by the policy before a claim can be paid.

If the claim gives rise to one of the issues that has been appealed to the High Court in the second BI test case, we may be unable to finalise the claim until the final judgment is received. When this occurs, we’re committed to supporting our customers through the claims process, and assessing claims in an efficient manner.

If the loss doesn’t fall within the scope of cover then the claim will not be paid.

Further information

For up to date announcements and information regarding BI test cases, visit the Insurance Council of Australia website.

Where you have purchased business interruption cover and you believe you have suffered a loss as defined by your policy, you should consider lodging a claim.

Before a claim can be paid, the claim will be reviewed subject to the following:

1. Your business interruption insurance cover.
2. Your ability to demonstrate a loss that falls within the scope of cover provided.
3. Evidence of the value of the loss being claimed before a claim can be paid.

Where the loss doesn’t fall within the scope of cover, the claim will not be paid.