Cafes, caravan and camping park lose BI disputes
A caravan park and camping ground business and an operator of cafes in WA have both lost disputes over business interruption cover during the pandemic.
The Australian Financial Complaints Authority (AFCA) is continuing to work through disputes lodged over refusals to cover disruptions resulting from covid restrictions, with decisions guided by the insurance industry legal test case outcomes.
The caravan and camping ground business near Coffs Harbour said it suffered a significant reduction in income because of the pandemic, with NSW State Government orders restricting access to the premises.
The AFCA decision, in favour of Allianz, says satisfying the policy requirements of “closure” and “outbreak” is not enough to establish a valid claim under the policy.
It must also be shown that the partial closure was “as result of” an outbreak within a 20km radius of the premises. But there’s no reference to the policyholder’s business premises in the Government directions.
“There were no specific government orders specifying the location of the complainant’s business,” the AFCA adjudicator says.
AFCA also rejected an argument that the claim should be paid as a result of a prevention of access clause in the Steadfast Business Pack policy.
The ruling says the Federal Court found a policy wording in a test case matter didn’t apply to the virus but “to the contemplated risk of physical damage or injury to property or persons, and not the kind of harm caused by a human infectious or contagious disease”.
In another dispute, WA cafes, which had a Business Protect policy with Suncorp, made a claim under a hybrid clause after two of the businesses’ five premises were unable to operate.
AFCA says the decisions around the restrictions ordered by the Government were not specifically as a result of outbreaks near those premises.
“When announcing the initial order restricting non-essential activities on 23 March 2020, the WA Premier stated, ‘These measures have been put in place to protect all Western Australians. This is about saving lives. It is as simple as that’,” the AFCA ruling says.
An exclusion for emergencies declared under the Biosecurity Act 2015 would also apply in the case of the policy covering the cafes, the decision says.