Business owner loses covid BI case after family tragedy
A caterer who flew to England to attend a funeral for her father and her brother but could not return to Australia because of illness and covid rules has lost a business interruption dispute.
The insured began a food business at a Darwin social club in January 2020, but it was put on hold about February 18 for her trip and because casual staff could not run it independently.
The funeral was on March 13. Soon after, the woman contracted covid and had to self-isolate, and she could not return because of Australia’s international border closure.
NT government trading restrictions were introduced in March 2020 and the policyholder lodged a claim on April 6.
But the Australian Financial Complaints Authority says that while there may have been a covid outbreak within 20km of the Darwin premises in March – as required by the woman’s policy with IAG – the business was already closed for other reasons.
“The policy does not respond to a loss caused by these factors in these circumstances,” the authority’s dispute decision says.
The policyholder has remained overseas and the business has not reopened.
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The ombudsman says IAG can deny the claim, which it has managed in a reasonable manner overall, but it must pay $2000 non-financial loss compensation.
It says the complainant had to deal with claim complexities while in a time zone up to nine hours behind Australia’s east coast and while mourning family members.
The insurer could have managed the claim better during excessive delays as test cases moved through the court system, and it should have communicated better and responded as though the policyholder was a vulnerable claimant, the ombudsman says.
Meanwhile, AFCA has also backed IAG’s rejection of a business interruption claim by a pizza restaurant after the owner was instructed to isolate as a covid case close contact.
The ombudsman says that is not the same as having a confirmed case at the premises that forces closure.
“The complainant has not shown the business was ordered to close by a public authority. Neither has the complainant provided information to show that closure of the restaurant was a consequence of disease at the restaurant.”