QBE has launched its own test case in the Federal Court to test the impact of Victorian property laws on business interruption exclusions citing the Quarantine Act.

The case involves a potential $2.3 million claim by the liquidators of Educational World Travel (EWT), a firm that has organised school trips to destinations including North America, Asia, Europe and the Pacific.

The case is separate to the second business interruption test case overseen by the Insurance Council of Australia (ICA), recently launched in the Federal Court after discussions with the Australian Financial Complaints Authority (AFCA).

But QBE has taken the matter to the same court and is seeking to have it run alongside the other test cases. The matter is outside the jurisdiction of AFCA as the claim is larger.

“QBE is of the view that it is important to provide certainty to insureds for a court determination on the Property Law Act issue at the same time as the court determines the coverage triggers,” a spokeswoman told insuranceNEWS.com.au.

“We hope that the outcome of this court determination, plus the second industry test case, will be a one step process for providing greater clarity to both customers and insurers alike and establish a path forward to manage these claims.”

The action is in relation to section 61A of the Property Law Act 1958 (Vic), which insurers suggest has the effect that references to the repealed Quarantine Act should be construed as references to the Biosecurity Act.

“The court’s additional determination on the Property Law Act coverage restriction will only impact BI claims where the contract is governed by the law of Victoria,” the spokeswoman said.

QBE will pay the costs for EWT liquidators BRI Ferrier, represented by KHQ Lawyers. The insurer will be represented by Dentons.

In the ICA’s first test case in the NSW Court of Appeal insurers argued more broadly that exclusion references to the Quarantine Act and subsequent amendments included the replacement Biosecurity Act.

The court found against insurers in that case and arguments in favour of an appeal are now set to be heard in the High Court.

The QBE case is listed as QBE Insurance (Australia) Limited v David Coyne in his capacity as liquidator of Educational World Travel Pty Ltd (in liquidation) & Anor.

See ANALYSIS.