Federal Court action taken against Suncorp over a rejected COVID-19 business interruption claim lodged by a Melbourne restaurant has been resolved, the insurer said today.

Rockment, which owns the Vanilla Lounge in suburban Oakleigh, lodged a claim after Victorian lockdown orders disrupted its business. Suncorp-owned Vero declined payment, citing exclusion wordings for emergencies declared under the Federal Biosecurity Act.

The Full Court last year ruled on a specific clause question put as part of the wider case, but both sides took positives out of the finding and Rockment pressed ahead with the case.

But today, in a note to the Australian Securities Exchange, Suncorp said the case had settled.

“This case related to COVID-19 business interruption insurance litigation from a customer in Victoria,” the statement said.

“In December 2020, the Federal Court of Australia ruled on a pandemic exclusion clause contained in one of Suncorp’s business interruption policies written under the Vero Insurance brand.

“The Court accepted Suncorp’s argument that the biosecurity act exclusion applied broadly for losses connected with COVID-19.

“The case has now been resolved, and judgment will be entered in favour of AAI Limited T/A Vero Insurance.”

Suncorp says that “while no indemnity payment was paid”, it will make a contribution to the plaintiff’s legal costs “given the industry wide significance of the issue considered”.

“In light of this outcome, Suncorp continues to believe that its overall reserving is appropriate and will be reviewed again as part of finalising the 31 December half year financial position.”

The claim was not part of the industry business interruption test case, which is awaiting judgment after appeal hearings concluded last week.