Whether JobKeeper is taken into account for business interruption insurance calculations will have a significant effect on possible claim payments, given the level of support received under the government program, Sedgwick Australia says.

The Full Court decision on the second industry test case on covid-related business interruption claims ruled that JobKeeper should not be taken into consideration, reversing an earlier decision. Insurers have filed an application seeking leave to appeal to the High Court.

Sedgwick Head of Forensic Advisory Services Emma Levett says in some cases losses can be almost negligible if JobKeeper payments that mitigated covid impacts are considered.

“In the sample of claims that we have looked at to date, JobKeeper is significant,” she told insuranceNEWS.com.au.

Sedgwick says based on the Full Court outcome there remains limited opportunity for policyholders to make successful claims for business interruption losses, but some policies will respond, bringing the JobKeeper issue into play.

The number would increase if High Court appeal applications filed by two policyholders in the test cases are successful.

Ms Levett says covid-related business interruption claim assessments are complex given policy differences, the varying types and locations of businesses, and issues where courts haven’t given guidance, such as indemnity periods.

“The individual circumstances of each insured that has a policy are different,” she said. “We have disparities in the experience of business, and the effects of the lockdowns and the pandemic.”

If the High Court agrees to hear appeals, it could be at least later this year before decisions are made, meaning businesses will have to provide records going back several years in support of claims.

The Insurance Council of Australia (ICA), in consultation with brokers, has prepared a guidance list that provides a general outline of documents and information required to submit a business interruption claim to help smooth the process.

“Insurers, including those that are not involved in the court proceedings, are committed to applying the principles of the courts’ final ruling consistently and efficiently to all business interruption claims,” ICA says.

If a claim gives rise to one of the issues that has yet to be resolved by the courts, the insurer will inform the policyholder that it is unable to finalise the claim at this time, but will do so expeditiously once a final determination has been made.”