Although each policy provided cover for business interruption losses caused by the outbreak of an infectious or contagious human disease, the insurers refused to pay out as there was an exclusion in each policy for declared “quarantinable diseases” under the Quarantine Act 1908, however, it was repealed in 2016 and was replaced by the Biosecurity Act 2015 which referred to “listed human diseases” instead with COVID-19 being so listed in January 2020.
The Court of Appeal decided in HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296 that the insurers could not rely on the exclusion as it was not up to the Court to correct their failure to refer to the Biosecurity Act.
The insurers appealed to the High Court of Australia but on 25 June 2021 that Court refused special leave to appeal meaning the Court of Appeal decision stands.
Certainly, any business owner, who has business insurance and was affected by lockdowns or other COVID-19 related incidents, should consider making a claim for business interruption and, if knocked back, should carefully examine whether the reason given by the insurer is valid.