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ICA sees BI pandemic claim clarity this year

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Insurers and policyholders contesting pandemic-related business interruption claims “will have certainty on most substantial issues” this year as expedited legal hearings and appeals are completed, the Insurance Council of Australia (ICA) says.

The High Court of Australia last week agreed to hear arguments supporting an insurance industry application to appeal the first business interruption test case ruling, marking the final phase of that legal action.

The NSW Court of Appeal last year found against insurers on whether they could exclude cover using policy wordings citing the Quarantine Act 1908 and subsequent amendments. The Act was replaced by the Biosecurity Act 2015.

The High Court will hear arguments in support of an appeal on a date to be determined in May or June at the earliest.

“The insurance industry looks forward to presenting what we believe is a compelling case based on a solid legal framework,” ICA CEO Andrew Hall said.

“Given this issue relates to a policy exclusion for which insurers have not been collecting premiums, seeking reinsurance or collecting reserves, there is a strong public interest benefit in the High Court hearing oral arguments.”

ICA says a second case lodged in the Federal Court that deals with a range of other issues is also being expedited, with a trial proposed for the first-half of September and any appeal to the Full Court to be dealt with in the first week of November.

“Once final rulings have been obtained from the courts, insurers are committed to applying the relevant principles in an efficient, transparent and consistent way when assessing claims,” Mr Hall said.