The fate of thousands of small businesses affected by COVID-19 is in the hands of a court.
The cases, which were heard by a panel of judges, focused on claims for business interruption insurance policies issued after the pandemic.
The COVID-19 and associated lock-downs have sparked lawsuits regarding the insurance coverage for business interruption.
According to insurers, these policies were never intended to cover pandemics. In fact, they were mistakenly labeled as such in their documents.
This time, the disputes related to the policies have been handled by the insurance companies. This allows them to claim more payouts.
In eight of the nine test cases, Justice Jagot ruled in favor of the insurers.
Suncorp and IAG have acknowledged the court decision and said they would review their contingency arrangements for handling claims following the lockdowns.
IAG is reviewing the decision made by the NSW Court of Appeal and whether it should appeal. It also continues to consider the impact on its business interruption insurance provision.
Suncorp said it would carry out a review of its provisions related to COVID-19 claims, as it continues to await the outcome of an appeal process. The company noted that its provisions for the period remained unchanged.
Andrew Hall said the ruling would help resolve the issue.
Justice Jagot’s ruling will not be the last word in the case, as business owners are planning to challenge the decision through an appeal.
Law firms representing thousands of insurance customers have said the fight against QBE and Lloyds has “further to run”.
John Berrill, the principal at Berrill & Watson, said a final decision on the matter remained a long way off.
Among the major insurers, Suncorp, QBE and IAG have all disputed claims.
The class actions against insurance companies will be back in court in February next year.
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