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High Court rejects BI test case appeal application

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The High Court has today denied the Insurance Council of Australia’s (ICA) application to appeal a judgment in the first test case on business interruption claim denials.

The NSW Court of Appeal last year ruled insurers couldn’t rely on exclusion wordings citing the Quarantine Act and subsequent amendments to deny claims for COVID-19 related disruptions.

Legal representatives for insurers today presented arguments to the High Court of Australia outlining why an appeal of that decision should be considered.

ICA says it acknowledges the High Court’s decision to deny special leave to appeal.

“While we are disappointed, this decision on the first test case provides us with certainty and allows the industry to focus on the issues to be resolved through the second test case underway in the Federal Court of Australia,” ICA CEO Andrew Hall said.

ICA says insurers will respond to affected customers who have lodged business interruption claims on a case-by case basis, but the vast majority of claims will not be able to be finalised until further clarity is provided by the second test case.

That case will determine the meaning of policy wordings in relation to the definition of a disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate, as well as policies that contain a hybrid of these type of wordings.

The second case is expected to be heard in September, with any appeal likely to be considered in November.

“We encourage policy holders who are considering lodging a claim to contact their broker or insurer, and make sure they are keeping all the necessary paperwork,” Mr Hall said.

“Once finalised, insurers are committed to applying the courts’ decisions in both test cases in an efficient, transparent, and consistent way when assessing claims.”

More details in our afternoon bulletin.