Plaintiff law firm Gordon Legal has filed two class actions over business interruption claims declined by QBE and Lloyd’s, and says it is investigating actions against other insurers as well.

The QBE filing is on behalf of any type of business that held business interruption cover with the insurer during the pandemic. It is led by Strand Fitness, while the Lloyd’s matter involves jewellers and gem merchants. Both actions are set for the Federal Court.

Gordon Legal Partner Andrew Grech says class actions offer strength in numbers and are the best chance for businesses to recoup losses given the response by insurers.

“Accessing the payout that we believe they are entitled to will mean the difference between survival and failure of many businesses,” he said.  “We think insurers are taking every legal option open to them to slow down the process and avoid settling claims.”

QBE says it will defend the law firm’s representative action, noting the issues raised appear substantially similar to those currently before the Federal Court in the second industry test case and its own Federal Court proceeding related to Educational World Travel.

The insurer says it is committed to applying test case outcomes when assessing claims and is satisfied its reserving for business interruption claims remains “robust”.

Gordon Legal is running the class actions with assistance from Berrill & Watson, while Omni Bridgeway is providing funding.

The firms have urged enterprises with business interruption policies held with other insurers to also register their interest for further class actions.

The Insurance Council of Australia’s (ICA) second test case is due to be heard in September in the Federal Court while QBE’s own proceeding, set to start on July 22, will look at Victorian property law and wordings citing the repealed Quarantine Act.

ICA has urged small businesses to submit a claim through their broker or insurer if they believe their policy responds.

“While many claims will have to wait until the outcome of the second test case, lodging a claim now means that once that outcome is known a resolution can take place quickly, providing certainty for policyholders,” ICA CEO Andrew Hall said.