The High Court decision today against hearing further appeals on business interruption cover during the pandemic has largely drawn the industry test case process to a close, the Insurance Council of Australia (ICA) says.

“Today’s decision by the High Court marks a significant milestone in a process that at its heart has been about understanding the extent to which business interruption insurance provides cover under the unprecedented conditions we experienced over the last two and a half years,” CEO Andrew Hall said.

Coupled with the first test case ruling, the decision provides guidance to help facilitate fair and consistent determinations, and insurers and brokers will be communicating “directly and quickly” with policyholders who have made claims affected by the judgment to explain next steps, he says.

As reported in a Breaking News earlier today, the High Court declined to hear further appeals on three test case matters, with two applications filed by policyholders and one from an insurer. The outcome means the Full Court judgment handed down in February stands.

The Full Court substantially upheld the arguments of insurers in four of the five matters in the test case which were appealed. In the other case, cover was triggered, but it was not clear whether there had been a relevant business interruption loss. The policyholder may still provide more information.

The outcome today also upholds the Full Court ruling that JobKeeper payments are not taken into account to reduce insurance payments where a policy does respond.

IAG, which was involved in two of the second test case matters, requested a trading halt in its shares today to enable it to consider the impact of the High Court determination.

The company has already released $200 million of its business interruption provision, with $975 million retained at June 30.

The test case saga started in 2020, with the first test case on outdated policy wordings citing the Quarantine Act going against insurers. The second looked at a broader range of issues including proximity of an outbreak to a business and the impact of government orders.

ICA says claims will ultimately be determined based on the applicable principles of the judgments in the cases as well as the wordings of a particular policy.

Berrill & Watson Principal John Berrill says the Full Court set out a road map that shows how businesses can demonstrate valid claims, and while test case examples had not been successful, other businesses affected by the pandemic should look at their policies and circumstances.

“We think there are thousands of businesses that will still have viable claims,” he told insuranceNEWS.com.au. “This is not the end of the ball game.”

Several class actions related to business interruption disputes may also still move forward after they had been placed on hold pending the outcome of the High Court process.

The High Court was this afternoon also considering an appeal application filed by The Star Entertainment Group in its dispute with Chubb and other insurers.