Brokers have moved to reassure WA clients that business interruption claims are likely to be paid if they’ve been affected by the June 3 explosion that knocked out 30% of the state’s gas supply.

But some brokers admit clients could miss out if their policy terms are particularly restricted.

Specialist Underwriting Agencies Senior Underwriter Denis Morrissey hit back at claims in last week’s insuranceNEWS.com.au that many small commercial gas customers may not be covered because they did not lose their entire gas supply.

The WA Chamber of Commerce and Industry estimates the crisis will have cost the state $6.7 billion by the time full supply returns in December.

Mr Morrissey says business interruption policies are intended to cover such an event.  

“The policy covers an interruption or interference to the business. I am not aware of any policy wording in the industry where partial loss of supply would not be covered outside the standard deductible of the policy” he said.

Another broker contacted insuranceNEWS.com.au to say the number of policyholders likely to have claims knocked back “is very small”.

But Perth-based EBM Insurance Brokers MD Alan Bishop warns claims will depend heavily on individual policy wordings, suggesting some commercial policyholders will miss out.

“It does depend on the wording and how underwriters interpret that,” he told insuranceNEWS.com.au. “It’s difficult to make sweeping statements.

“Unlike losses arising from direct loss of supply to a business, which is commonly insured, losses arising to a business from loss of supply to a customer or supplier are rarely covered. If such cover is provided, then I would expect partial losses to be covered.”

Mr Bishop says commercial clients will be assessed on a case-by-case basis.

He says the full effect of the explosion on the WA economy is yet to hit home, though some companies have already been placed into receivership or administration.

“It is far more concerning to this economy than anything going on in the US. The knock-on effects haven’t been fully felt as yet,” he said.  

Law firm Clayton Utz also says claims will depend on policy terms. Brisbane-based partner Mark Waller says clients are often unaware policies contain optional or automatic extensions of cover.

“There may also be other relevant exclusions and limitations which require analysis depending on the specific terms of the policy,” he said.