A Federal Court decision on the Insurance Council of Australia (ICA) second test case could be handed down as early as next month, with a potential appeal already scheduled for November.

Justice Jayne Jagot reserved her decision on Wednesday after eight days of hearings on nine small business claims representing a variety of sectors and locations.

Allianz, IAG, Chubb, Guild and Swiss Re were involved in the test case, while an additional QBE matter concerning a Victorian travel agent was also heard.

The hearings looked at whether COVID-19 was covered under diseases clauses and whether government restrictions in response to the pandemic triggered prevention of access cover.

Arguments included that isolated instances of COVID-19 did not amount to an “outbreak”, that government restrictions weren’t a result of events within a set radius of a premises and causal links in prevention of access extensions had not met requirements.

The pandemic was outside the meaning of wordings citing “threat of damage to persons or property”, it was argued, while legal teams debated whether requirements had been met if a business was still partly operating.

Quarantine Act exclusions, featured in the first ICA test case, came back into focus as lawyers maintained Section 61A of the Victorian Property Law Act had the effect of substituting the current Biosecurity Act for the repealed Quarantine Act in that state.

The hearings also examined claim payment calculations, if cover is triggered, including adjustments for Government assistance programs and how surrounding pandemic impacts should be taken into account.

ICA says the unprecedented nature of the pandemic has meant court rulings have been necessary to establish principles involved.

“Insurers have taken a number of steps to ensure these claims will be prioritised when final rulings are made,” CEO Andrew Hall said ahead of the hearing.

The first ICA business interruption test case, on whether exclusions citing the Quarantine Act and subsequent amendments included the current Biosecurity Act, was heard by the NSW Court of Appeal on October 2 last year.

The five-member Full Court decision handed down on November 18 went against insurers. The High Court in June declined to hear an appeal.

Court documents related to the second test case are available here.