Relevance of the Test Case
our previous article, the business interruption test case in the UK has concluded and the Insurance Council of Australia (‘ICA’) has commenced an Australian business interruption test case. Filed in the NSW Supreme Court, the test case will focus on claims made with two insurers, Hollard and HDI Global Specialty.i Similarly to the UK test case initiated by the Financial Conduct Authority (‘FCA’), the proceedings aim to clarify how infectious disease exclusions within business interruption policies are to apply in the context of the COVID-19 pandemic.
The CEO of the ICA, Rob Whelan, has stated that insurers believe that the intention of their policy exclusions is clear.ii Often, cover against pandemics is excluded from insurance policies, as the wide application of potential losses can cause difficulty for insurers.iii Despite this, Whelan has acknowledged that the test case will lead to “greater legal certainty” on the issue of business interruption claims.iv