Slater and Gordon says it has launched a class action against IAG on behalf of “thousands of Australian business interruption insurance policyholders” whose claims for losses from forced pandemic-related closures have been declined by the insurer.

The plaintiff law firm confirmed with insuranceNEWS.com.au it is leading the lawsuit after IAG announced this morning it is aware that CMC Hospitality has filed an application in the Federal Court starting a representative proceeding against the business.

IAG did not mention the name of the law firm and says it has not been served with the application except that “it appears to relate to insureds who hold policies with CGU and business interruption losses related to COVID-19”.

The insurer also says it is not aware of the detailed nature of the application.

“IAG notes it is one of a number of insurers participating in an industry test case in the Federal Court of Australia, and that the hearing is due to begin today,” the insurer said.

“IAG is participating in the industry test case, which it believes is the most efficient process to obtain clarity and to resolve issues for customers with business interruption claims.

“IAG intends to follow the final rulings of the courts and assess any business interruption claims as quickly as possible following the final resolution of the issues in court.”

The insurer says it “remains satisfied with the adequacy of its provision for business interruption claims”.

Slater and Gordon Practice Group Leader Mathew Chuk says the strategy by insurers to date has been to been to divert, deny and delay.

“Businesses have already waited 18 months, with no clear end in sight, for clarity on their business interruption insurance coverage,” Mr Chuk said in a statement to insuranceNEWS.com.au.

“For many, this has been the toughest 18 months they’ve faced, and payment of these claims is sorely needed.

The objective of this class action is to have the claims of the insured assessed and paid out as quickly as possible.”

Slater and Gordon says the class action is managed and funded by litigation funder ICP.