Countless businesses, including restaurants, bars, hairdressers and gyms, are struggling due to COVID-19 related business interruptions.
As we noted earlier in the year, there has been a lot of concern and ambiguity with respect to whether or not your insurance policy will respond to the COVID-19 pandemic affecting so many.
Yesterday, the Court of Appeal, Supreme Court of New South Wales gave some further guidance to assist us in understanding whether an insurance policy will respond. In HDI Global Specialty SE -v- Wonkana No. 3 Pty Ltd  NSWCA 296, the defendants were insured against business interruption. Claims were made on their policies for interruptions relating to COVID-19. Those claims were denied on the basis of an exclusion which read:
“The cover…does not apply to any circumstances involving ‘Highly Pathogenic Avian Influenza in Humans’ or other diseases declared to be quarantinable diseases under the Australian Quarantine Act 1908 and subsequent amendment.”
The difficulty for the insurers in relying upon this exclusion was that the Quarantine Act 1908 (Cth) was repealed on 16 June 2016, and replaced with the Biosecurity Act 2015 (Cth). Notwithstanding, it was the insurers’ position that the exclusion clause should be interpreted as extending or referring to “diseases determined to be listed human diseases under the Biosecurity Act 2015 (Cth)”, either due to the Biosecurity Act 2015 (Cth) being a “subsequent amendment” or on the basis that the reference to the Quarantine Act 1908 (Cth) was an obvious mistake.
The Court of Appeal, Supreme Court of New South Wales rejected this position and declared that COVID-19 was not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth) and the exclusion clause was not enlivened in the circumstances.
We have received reports of claims being denied where businesses have held an insurance policy that has a similar, or identical, exclusion clause. In our view, those denials should be the subject of significant scrutiny noting the decision made by the Court of Appeal, Supreme Court of New South Wales. Whilst we anticipate that the decision in HDI Global Specialty SE -v- Wonkana No. 3 Pty Ltd  NSWCA 296 will be subject to an appeal to the High Court of Australia, it is our view that if you hold an insurance policy which may respond to any losses suffered as a result of the COVID-19 pandemic, or you have been subject to a denial of an insurance claim as a result of COVID-19, you should seek advice and assistance immediately.
The Chamberlains Insurance Team is ready, willing, and able to assist and we invite enquiries in relation to this issue.