Dry cleaning, travel agency and stage clothing enterprises are among nine claimants that will have business interruption cover denials examined in a Federal Court test case brought by the Insurance Council of Australia (ICA).

The test case also involves a gym, bar and restaurant businesses, a dental practice, a property landlord, and a beauty salon and looks at issues around disease clause limits and prevention of access, court documents obtained by insuranceNEWS.com.au show.

The cases represent a geographical spread with businesses located in Townsville, Brisbane, Sydney, Wollongong, Melbourne and Adelaide and involving insurers Allianz, Chubb, IAG, Guild and Swiss Re.

The Taphouse Townsville, in a claim lodged with IAG brand CGU, says it is entitled to cover due to a Queensland Government March directive that required it to close the dine-in restaurant and bar business and rely on takeaway and home deliveries.

CGU says, regarding the prevention of access extension, that the government measures did not constitute a legal authority preventing or restricting access to the premises, and the measures were not “a result of damage to or threat of damage to property or persons within a 50-kilometre radius” of the business.

On the disease extension, it says the measures did not constitute a legal authority closing or evacuating all or part of the premises and were not a result of an outbreak of [COVID-19] occurring within a 20km radius of the Taphouse.

A claim by Meridian Travel & The Cruise Gallery in Heidelberg in suburban Melbourne, which said its business was disrupted by an overseas travel ban and the COVID-19 situation generally, was also denied under both disease and closure or evacuation extensions.

The Stage Shop clothing and costume business, which had its claim similarly denied by Allianz, says it closed a shop in Adelaide and stood down employees after SA government measures required its customers to cease operating. It also says the state’s first outbreak of COVID-19 occurred at the airport, which is 6.8km from its premises and within a required 20km radius.

A claim rejected by Swiss Re involves a cosmetic treatment services business operating from within the Marrickville Metro Shopping Centre in Sydney’s inner west.

Exclusion clauses cite diseases declared under the Biosecurity Act 2015, while the prevention of access clause cites action taken to avoid or diminish risk to life or damage to property within 5km of the location, but not taken in Australia or NSW generally or in another part of Australia or NSW.

The test case filings also consider how business interruption payments should be reduced to take into account uninsured impacts and trends if the court finds cover is valid.

In the Taphouse claim, CGU says the business would not be entitled to a complete indemnity because the interruption would have happened at least to some extent, regardless of Queensland government measures, due to other uninsured impacts of the COVID-19 pandemic.

Some of the policies cite the repealed Quarantine Act 1908, replaced by the Biosecurity Act 2015, as a grounds for exclusion, with filings noting that the wording issue has been looked at in a separate test case, which went in favour of policyholders in the NSW Court of Appeal.

A special leave to appeal application on that matter is before the High Court, while insurers have said even if that decision goes against them, there are other hurdles for claimants.

ICA maintains pandemics are not contemplated for coverage under most business interruption policies, but there’s a need to clarify the legal principles used to resolve disputes.

The nine claims in the second test case are:

Allianz Australia Insurance Ltd. v The Stage Shop Pty Ltd (Formerly Visintin Pty Ltd)

Allianz Australia Insurance Ltd v Mayberg Pty Ltd

Chubb Insurance Australia Ltd v Market Foods Pty Ltd

Chubb Insurance Australia Ltd v Phillip Waldeck

Guild Insurance Ltd v Dr Jason Michael t/a Illawarra Paediatric Dentistry

Guild Insurance Ltd v Gym Franchises Australia Pty Ltd

Insurance Australia Ltd v The Taphouse Townsville Pty Ltd

Insurance Australia Ltd v Meridian Travel (Vic) Pty Ltd

Swiss Re International SE v LCA Marrickville Pty Ltd