Business Interruption Claims Resulting from the Impact of COVID-19: Results of the Second Test Case

The Federal Court of Australia has issued a judgment in a second test involving the COVID-19 pandemic and business interruption insurance.

The second test case was made up of nine small business claims from a range of business sectors and location. The Federal Court took note of the characteristics of each policyholder’s business and issued the timely reminder that no two policyholders will experience the same identical factual circumstances and that insurance companies may potentially avoid paying out billions in payouts.

The test case looked at under what conditions a business could claim for downturn in trade during the pandemic, including if a government lockdown order was adequate or whether a business needed an actual case of the virus in its proximity to claim.

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The Federal Court’s decision is listed for appeal.

“If policyholders believe they have a claim against their business interruption cover, they are encouraged to contact their insurer or broker who will provide them with the information they need to lodge.”