Skip to content

Business Interruption Claims Class Action

Business Interruption Test Cases Update

On 14 October 2022, the High Court refused to grant special leave to the parties in the business interruption test cases.

What are the business interruption test cases?

The business interruption test cases are industry-funded test cases, intended to deal with the issues to do with business interruption insurance. They are not related to the class action and Gordon Legal is not involved with the legal proceedings. Nonetheless, the outcome of the test cases is likely to have an important effect on the way insurers deal with business interruption claims.

What does this mean for me?

This means that there is now legal certainty about some aspects, but not all aspects, of business interruption claims. Some claims may now have stronger chances of success than others.

If you would like to discuss your business’s claim, please contact Gordon Legal on 1800 21 22 23.

Are you entitled to claim on your business interruption insurance for losses caused by COVID-19?

Do you have Business Interruption insurance?

Has your business suffered revenue losses from COVID-19 lockdowns?

Have you lodged a business interruption claim that has been rejected by your insurer?

Despite what your insurance company may have told you, you may be entitled to make a business interruption insurance claim.

Most policies have exclusion clauses for infectious diseases and in our view some Australian insurers have been wrongly rejecting claims from struggling businesses on the basis that their policies don’t cover pandemics.

How can we help you?

Gordon Legal, in collaboration with Berril & Watson, is currently assisting business owners to make claims on their business interruption insurance policies for COVID-19 related losses to profit and revenue.

We are offering free, no-obligation legal advice regarding your business interruption policy and the possibility of lodging a claim against your insurer. Simply register with Gordon Legal and a member of the Business Interruption team will be in touch shortly.

You can also provide your policy and product disclosure statement to biclaims@gordonlegal.com.au or upload the documents when you submit your registration.

Regrettably, many business owners have had their business interruption insurance claims rejected or have been told by their brokers and insurers that their policies do not cover pandemic related losses, when in fact many policies will provide cover for loss of profits and revenue. It is critical that business owners obtain independent legal advice as many may be entitled to the benefit of their insurance cover and simply not be aware of their entitlements.

Berrill & Watson is a leading plaintiff superannuation and insurance law firm. Gordon Legal is a plaintiff law firm with extensive experience in complex class action litigation and obtaining outstanding outcomes for their clients. Working in collaboration, Berrill & Watson and Gordon Legal offer a breadth of significant experience and knowledge to guide business owners through the insurance claims process.

Many businesses have tried to claim on these policies on the basis that this cover extended to loss of revenue or profits suffered as a result of outbreaks of COVID-19 within a certain distance of their premises, or closures ordered by the government which affected their premises.

If you own or operate a business which may have experienced a loss of revenue or profits due to the COVID-19 pandemic, and believe that you may have held business interruption insurance cover during that time, please contact us for a free, no-obligation evaluation of your insurance policy. For more details register here, and we will get in touch as soon as possible.

Class Actions

We have already commenced class actions against two insurers, QBE and Lloyd’s. For more information, click here

Frequently Asked Questions

Business Interruption Claims

Gordon Legal and Berrill & Watson will provide you with a free and no obligation initial assessment of whether you are able to make a claim against your insurer and if so, how you should do so.

There are many common features across individual insurance policies and within policies. However, there are also some differences which need to be understood. Obtaining independent legal advice is critical to business owners understanding their entitlements.    

Gordon Legal is offering to review your insurance policy and provide free preliminary advice. Once you receive that advice you can decide whether to proceed or not – there will be no obligation on you to proceed or to instruct Gordon Legal to act on your behalf.

To receive free legal advice regarding your entitlements, you may:

  1. Register your interest (include a link to register your interest page) with Gordon Legal;
  2. Send a copy of your insurance policy and any correspondence from your insurer or broker to biclaims@gordonlegal.com.au;
  3. A member of our team will contact you shortly after receiving your registration.

Business interruption insurance provides cover for business owners if their business is not able to operate normally, arising from factors outside your control.

There are different types of business interruption cover, some of which may cover losses relating to the COVID-19 outbreak in Australia and/or the restrictions on trading imposed by the various State, Terrtory and Federal Government agencies arising from COVID-19.

If you have an “industrial special risk” or “business insurance” policy, you are very likely to have business interruption cover included as part of those policies. If you are unsure whether your policy provides business interruption cover, contact us and we can check for you

There are generally two types of business interruption cover which are relevant to the COVID-19 outbreak. These are:

  1. “infectious diseases” cover; and
  2. “prevention of access” cover.

There may also be types of cover that are a combination of both.

“Infectious diseases” clauses cover interruption to business caused by the closure or evacuation of the business due to an outbreak of an infectious disease at or within a defined geographic radius of the business.

“Prevention of access” clauses cover interruption to business caused by an order of an authority or government body which prevents or hinders the use of or access to the business. The order must usually be made because of damage to property or persons at or within a defined geographic radius of the business.

Many business owners have had their business interruption insurance claims rejected by their insurers or have been told by their insurer that the policy don’t cover them.

We believe that many of these insurers have simply got that wrong and the information they have given business owners may be misleading and/or inaccurate.

It is crucial that you seek independent legal advice on your entitlements under your policy. Contact us and we can review your policy terms and how they may impact your claim for COVID-19 business interruption.

Yes. There are a number of avenues open to you to dispute your insurer’s rejection of your claim. For more information, contact us and we can provide you with the guidance you need.

You may have an exclusion in your policy for diseases declared to be either:

  1. a “quarantinable disease” under the Quarantine Act; or
  2. a “listed human disease” under the Biosecurity Act; or
  3. a combination of both of the above.

Some policies have no exclusion clause at all.

Contact us and we will check whether your policy has any exclusion clause and, if so, whether the exclusion would impact your claim.

The Quarantine Act 1908 was the legislation that governed Australia’s biosecurity powers. It allowed the federal government to declare certain diseases to be “quarantinable diseases” and take action in response to the biosecurity threat imposed by those diseases.

The Quarantine Act was repealed on 16 June 2016 and replaced by the Biosecurity Act 2015. The Biosecurity Act broadened the government’s biosecurity powers and allowed it to declare certain diseases to be “listed human diseases”.

The relevance of the two Acts to business interruption claims is that COVID-19 was declared to be a “listed human disease” under the Biosecurity Act, but was never declared to be a “quarantinable disease” under the Quarantine Act because the Quarantine Act was no longer in force when COVID-19 arrived in Australia.

Many business interruption policies had an exclusion for quarantinable diseases under the Quarantine Act, but insurers failed to update the policy wording when the Quarantine Act was repealed and replaced by the Biosecurity Act. Those insurers that failed to do so may be liable to pay claims for COVID-19 losses as a result.

For your claim to be successful, you may need to prove some or all of the following::

  1. There has been an outbreak of COVID-19 at or within a certain geographic radius of your business;
  2. There has been an order that closes or partially closes your business;
  3. There has been a decline in your business income because of the outbreak or order(s).

The specific requirements of a claim will vary depending on your individual policy terms and on the type of business you have.

If your claim has been rejected by your insurer, you need to get independent legal advice about your right to challenge that decision. There are a number of different avenues available to you to pursue in order to challenge your insurer’s decision.

We expect that insurers will seek to delay the claims process for as long as possible, or at least until the various legal challenges in relation to the validity of these policies and the relevant exclusion clauses have run their course. This may take many months. In the meantime, it is critical that you obtain advice to assist you in understanding your entitlements, whether and how to lodge a claim and what to do if your claim is rejected by your insurer.

If you have a lawyer who has experience in insurance claims, they will be able to help you. Gordon Legal is working in collaboration with Berrill Watson to ensure that we are able to provide clients with the assistance they need to both understand their legal entitlements and pursue them successfully, including, if necessary through litigation.

Provide advice on your entitlements to claim, how you should do so and give you advice on how to successful pursue your entitlements.

Your policy schedule will set out the amount of cover you hold for business interruption. Your schedule may also have a sub-limit for the amount of loss you can claim under the infectious diseases or prevention of access clauses in your policy.

Generally, losses can be calculated by comparing your reduced business turnover since the COVID-19 outbreak with the turnover during the same period in the previous year. Although this may vary depending on your insurer.

Register today

We’re here to help

When you’re ready, give us a call or click on the button below to send us a message. It will go straight to a caring and committed member of our team who will contact you within 24 hours.