Hospitality enterprises including pubs and restaurants have launched proceedings in the Victorian Supreme Court over business interruption claims that have an estimated total value of about $20 million, legal firm Gadens says.

The Melbourne-based businesses, which include Transport Hotel in Federation Square, have had claims denied on the basis that their policies don’t cover the COVID-19 related interruptions that led to lockdowns lasting months.

Gadens says the actions commenced so far represent an initial batch of claims and more will be filed.

“A number of pubs and restaurants across Melbourne continue to face uncertainty, and it is likely to take the industry a long time to recover,” Gadens Partner Simon Theodore said.

“We are committed to helping these businesses recover as quickly as possible in forcing insurers to pay claims that should be paid.”

The action is being supported by litigation funder Court House Capital. The matters have not been filed as a class action, but it’s intended they would be heard concurrently.

“There is little doubt that Melbourne’s hospitality industry bore the brunt of forced business closures during two shutdowns, resulting in significant losses in revenue,” Court House Capital CEO Michelle Silvers said. “The funding of the business interruption claims by Court House Capital will assist in the recovery process.”

Insurers involved in the claims are Arch Underwriting, Catlin Australia, AIG, Chubb, Berkshire Hathaway Specialty Insurance, Pen Underwriting, Hollard, XL Insurance, Zurich and Miramar Underwriting Agency, the firm says.

“Whilst the claims all have the same sub stratum of facts that arise from COVID-19, the claims, whilst substantively similar, concern a number of clauses that the insureds contend trigger claims,” a Court House Capital spokeswoman told insuranceNEWS.com.au.

The Insurance Council of Australia (ICA) first test case regarding wordings citing the Quarantine Act and subsequent amendments is being appealed to the High Court, while a second test case on other matters is due to be heard in the Federal Court later this year.

A number of other separate legal actions are also being pursued and some legal firms are considering potential class actions.