Fight goes on for COVID-hit businesses

Fight goes on for COVID-hit businesses

MELBOURNE, 08 October 2021: Australian businesses trying to recover money they believe is owed to them by their insurers for COVID-related losses will continue their fight after today’s ruling in the Federal Court.

The judgment by the Honourable Justice Jayne Jagot in the business interruption insurance test case has provided some clarity around the obligations of insurers to pay policy-holders for losses related to COVID-19 and related government-imposed restrictions.

Today’s judgment is likely to be the subject of an appeal to the Full Federal Court, with the Court already allocating time for an appeal to be heard.

As a result of today’s judgment, the significant uncertainty for individual business owners and operators over whether their policy is likely to cover some or all of the losses they have incurred as a result of COVID-19 and associated government-imposed restrictions remains unresolved.

The QBE and Lloyds Business Interruption Insurance Claims Class Actions have been commenced in the Federal Court on behalf of certain QBE and Lloyd’s policy-holders by Gordon Legal and Berrill & Watson and are supported by dispute resolution finance leader Omni Bridgeway.

James Naughton, a Partner at law firm Gordon Legal who is leading the class actions, said the class action remained the best chance for businesses to have their claims heard and determined in an efficient and timely way.

“We continue to believe that QBE and many other insurers have failed to support businesses when they needed it,” Mr Naughton said. “Most have paid thousands of dollars in premiums for insurance to protect their businesses from downturns resulting from diseases, and yet 18 months later they still haven’t been paid one cent. Many of these businesses are again struggling through lockdowns, while still waiting for payouts that we believe they are entitled to. It now appears that further delays are inevitable, as the appeals process plays out over the course of 2021.”

John Berrill, Principal at Berrill & Watson, said: “Regardless of today’s judgment, a final decision in this test case remains and long way off and, even then, businesses will still have to prove they have a valid claim to secure a payment. It’s critical for businesses to get advice about whether they are covered, to gather all the necessary documents about their losses and to lodge a claim with their insurers. What’s really frustrating for Australian businesses forced to wait for money they believe is rightfully owed to them is that in the UK, these arguments were settled in January and businesses are already receiving payments for their losses.”

Kristen Smith, Investment Manager at Omni Bridgeway, said: “The battle goes on to recover money owed to Australian businesses who had every reason to believe their insurers had their backs in their time of need.” 

The Class Actions are next before the Court in February 2022.

For more information about the Class Actions or for information about how to prepare and lodge a BII COVID-19 claim business owners and operators should contact Gordon Legal at www.gordonlegal.com.au.