Business Interruption Claims Resulting from the Impact of COVID-19

Business Interruption Claims Resulting from the Impact of COVID-19

COVID-19 has impacted many small businesses across Australia.

Many business interruption policies in Australia wanted to exclude cover for pandemics by means of reference to the Quarantine Act, which is no longer in effect.

Under the Australian Financial Complaints Authority’s (AFCA) Rules, insurers can request that AFCA allow a complaint to be decided by the courts (rather than AFCA) as a test case.

The test cases have been commenced under protocol agreements between AFCA, participating insurers, and the Insurance Council of Australia (ICA).

The first test concluded in June 2021 when the High Court of Australia rejected insurers’ application for authority to appeal an earlier judgment of the NSW Court of Appeal that found in favour of policyholders.

“However, there are further interpretations of aspects of business interruption policies that need to be resolved through a second test case to establish whether policyholders will ultimately be covered”

A second test case has commenced and will be heard from 30 August – 8 September 2021 in the Federal Court.

Insurers will respond to affected customers who have lodged business interruption claims on a case-by case basis, however the vast majority of claims will not be able to be finalised until further clarity is provided by the second test case.


If you have business interruption cover, and your business is affected financially, you can lodge a claim with your insurer through broker.

Once final rulings have been obtained from the court after the second test case, insurers have committed to applying the applicable principles in an efficient, transparent, and consistent way when assessing customer claims.


  • Gather your evidence and collate documents like profit and loss statements to support any claim you may be able to make under your business interruption policy.
  • Have a claim form handy and fill out the appropriate information. If you do not have access to one, contact your broker
  • There is benefit in doing this now so you have all the relevant material together and ready to be submitted.
  • There is no difficulty in putting this material together now.