Gordon Legal has launched class actions in the Federal Court against QBE and Lloyd’s over the rejection of business interruption claims lodged due to COVID-19 pandemic restrictions.

The QBE action is on behalf of any type of business that held business interruption with the insurer during the pandemic, while the Lloyd’s action involves jewellers and gem merchants.

“We are launching these two class actions because we believe that the best chance businesses have to recoup what is rightfully theirs is through the strength in numbers a class action delivers,” Gordon Legal Partner Andrew Grech said today.

“We think insurers are taking every legal option open to them to slow down the process and avoid settling claims.”

QBE said today that it would be defending the representative action led by Strand Fitness.

“The issues raised in these proceedings appear to be substantially similar to those currently before the Australian courts in the second industry test case and [QBE’s] own Federal Court proceeding against Educational World Travel in liquidation and its liquidator,” the company said.

QBE says it’s committed to applying the rulings of the courts in the industry test cases when assessing claims.

Gordon Legal is running the class actions with assistance from Berrill & Watson, while Omni Bridgeway is providing funding.

The law firm is also investigating potential class actions against other insurers and is urging those with business interruption policies to register their interest.

The Insurance Council of Australia’s (ICA) second test case is due to be heard in September in the Federal Court while QBE’s own proceeding, scheduled to start on July 22, will look at Victorian property law implications for wordings citing the now repealed Quarantine Act.

ICA, which lost the first test case, has urged small businesses to submit a claim through their broker or insurer if they believe their policy responds, but finalisation of many claims may still not take place until the second case provides further clarity.

“The test case process has been utilised to provide certainty across a range of questions, and with each final decision by the courts, insurers will commence assessing claims that will respond to each ruling,” CEO Andrew Hall said last week.

“While many claims will have to wait until the outcome of the second test case, lodging a claim now means that once that outcome is known a resolution can take place quickly, providing certainty for policyholders.”