The Federal Court will tomorrow hold its first case management hearing into a business interruption (BI) lawsuit launched by The Star Entertainment Group against Chubb and other insurers.

Chief Justice James Allsop will preside over the hearing at 2:15pm in Sydney by web conference.

Chubb is the lead insurer of the policy. The Star launched the legal proceedings last month after the insurers rejected its BI claim made under its Industrial Special Risks policy.

The listed casino group says the insurers’ reasons for declining the claim, including on grounds that the cover did not cover non-physical losses, were “in breach” of the policy.

The other insurers named as respondents in the lawsuit are AIG, Allianz, Allied World Assurance, Assicurazioni Generali, HDI Global, Liberty Mutual, Picc Property and Casualty Company, Swiss Re International, XL Insurance and Zurich.

In a concise statement lodged with the court seen by insuranceNEWS.com.au, The Star disagrees with the insurers’ interpretation of what defines a “loss” as provided for in the BI section of the insurance policy, which runs until November 1.

It says the policy insures its businesses and subsidiaries against certain special risks, including “certain risks of business interruption” and that its BI claim falls within the terms described in the cover.

Insurers had told the casino operator the Civil Authority Extension in the policy refers to “loss” as a “physical loss” and that COVID-19 does not meet the “other catastrophe” terms contained in the policy.

The statement to the court says the insurers had said that “other catastrophe” refers to a “sudden disastrous [event] causing physical damage such as floods or bushfires, rather than pandemics such as COVID-19 that evolve over time”.

“The Star maintains that those reasons do not represent the proper construction of the policy and that insurers’ denial of indemnity is accordingly wrongful,” the statement says.

“The Star is accordingly entitled to indemnity in respect of that economic loss under Section 2 of the policy as extended by the Civil Authority Extension.”

It wants the court to “make the declarations specified in the application concerning the proper construction of the policy”.

The casino operator did not list a figure for the compensation it is seeking, but says its business continues to suffer economic loss, including a reduction in turnover and gross revenue.

Last month The Star reported a full-year statutory net loss of $95 million, while earnings before interest, tax, depreciation and amortisation fell 22.8% to $430 million.

The Star is seeking compensation on behalf of its other entities as well, including its property arms.