Lawyers have put forward final arguments to conclude eight days of hearings in the Insurance Council of Australia (ICA) second business interruption test case related to COVID-19 cover.

Justice Jayne Jagot this afternoon reserved her decision. Appeals are already expected and are set to be expedited to a hearing in November.

Insurer legal teams today reiterated that health data identifying individual cases of COVID-19 had not shown “outbreaks” in areas around insureds’ premises, causal links with government orders had not been established and policies have exclusions that apply to the virus.

Senior Counsel Edward Muston, appearing for Allianz and Guild Insurance, said in the case of an Adelaide stage clothing business, state government orders had not directed it to stop or scale back operations and the decision to close was made by the businesswoman.

“The actions she describes were motivated by, and an understandable response to, the obvious impact that the directions had on the demand for the goods and services being provided by the business, namely, it has to be recognised, a catastrophic impact,” Mr Muston told the court.

Senior Counsel David Williams for Swiss Re said “an outbreak and an occurrence are not the same thing” and, in the case of a claim by a beauty salon in Marrickville Sydney, government pandemic responses were not taken as a result of “an outbreak either at the situation or within a 5km radius of it”.

Mr Williams also pointed to a policy emphasis on property damage and the recent Federal Court decision against The Star Entertainment Group in relation to similar wordings.

Earlier, Senior Counsel Perry Herzfeld, appearing for IAG, told the court that cover for a travel agency in Heidelberg Melbourne had not been triggered by March government-ordered restrictions. By that stage, the business was already affected by overseas COVID-19 outbreaks, adverse publicity around the virus and international and local impacts on the cruise ship holidays, he said.

“The business collapsed in February before the international travel ban,” he told the court. “The true proximate cause of Meridian’s loss was the uninsured events.”

Lawyers appearing before Justice Jagot have debated whether Section 61A of the Victorian Property Law Act has the effect of substituting the current Commonwealth Biosecurity Act for the repealed Quarantine Act.

Mr Herzfeld pointed to 1890 Victorian laws, which referred to Imperial Acts and NSW laws, and subsequent legislation, in arguing current arrangements in the state are intended to extend to Federal legislation.

Insurers have also disputed the relevance of a UK Supreme Court test case decision that favoured insureds in relation to trends cases and calculation of losses.

The second test case consists of nine small business claims lodged with the Australian Financial Complaints Authority as part of its dispute resolution process. Insurers involved are Allianz, Chubb, Guild Insurance, IAG and Swiss Re. A case involving QBE has also been heard at the same time.