Important updates regarding COVID-19 Business Interruption Cover

LAST UPDATED: 19/11/2020

Please note:

If you have a Business Insurance policy in these professions:

  • Industrial Special Risks
  • Dietitian
  • Speech Pathology
  • Veterinary

Visit here

If you have a Business Insurance policy in these professions:

  • Chiropractor
  • Dentist
  • Osteopath
  • Podiatrist

Visit here



Understanding your Insurance policy

At times like this, understanding your insurance policy is essential. Understanding what you are covered for is just as important as understanding what you’re not covered for. While your insurance arrangements with Guild are specific to your individual circumstances and profession, following is some general information to bear in mind during this COVID-19 pandemic.

 

NSW Court of Appeal Test Case findings


What were the findings of the case?

The NSW Court of Appeal recently delivered a judgement in a test case relating to business interruption insurance – specifically whether insurers can enforce policy exclusions referencing the Quarantine Act 1908 (Cth) rather than the Biosecurity Act 2015 (Cth) in relation to COVID-19.

The NSW Court of Appeal ruled that exclusions with reference to the Quarantine Act 1908 (Cth), rather than its replacement the Biosecurity Act 2015 (Cth) cannot be enforced by insurers in relation to COVID-19.

This means that, pending any further action or appeal, Guild can no longer rely on the exclusion written in your policy wording for claims relating to COVID-19.

 

Please note:

If you have a Business Insurance policy in these professions:

  • Industrial Special Risks (ISR)
  • Dietitian
  • Speech Pathology
  • Veterinary

Visit here

If you have a Business Insurance policy in these professions:

  • Chiropractor
  • Dentist
  • Osteopath
  • Podiatrist

Visit here



Why was there a court case – was Guild taken to court?

No, the case was not specifically about Guild’s policies or exclusions. The test case was initiated and fully funded by the Insurance Council of Australia to provide clarity on the application of such infectious disease exclusions in relation to Business Interruption across the entire Australian insurance industry.

The case was prepared in consultation with the Australian Financial Complaints Authority (AFCA), as part of its dispute resolution process.



What does this mean for my policy?

The NSW Court of Appeal judgement, subject to application of: other relevant policy exclusions, appeals or other legal process, may mean that cover is available to you for COVID-19 induced loss of income in specific circumstances.

Under the “Prevention of Access" Additional Benefit to your Business Interruption cover, you may be entitled to cover for loss of income if:

  • COVID-19 is identified at your business premises; AND
  • As a result of this happening, your business premises is ordered to close by a competent government or other statutory authority.

Please note that both conditions must be present. For example, a customer or staff member has attended your business premises and subsequently tests positive for COVID-19 and as a result, your local Health Authority orders your business to close for the purposes of deep cleaning.

Notwithstanding the recent NSW Court of Appeal judgement and the application of the above policy triggers, unfortunately there remains considerable uncertainty around available cover that can only objectively be resolved via judicial determination following proper legal process.  We understand that this is frustrating for you and we all want a clear way forward on this issue. We are working closely at an industry level and with our own legal advisors to resolve these uncertainties as soon as possible. 



Is this decision final?

The Insurance Council of Australia on behalf of the insurance industry are currently assessing the findings of the Court and the ruling may be subject to appeal.

As such, we are anticipating further legal processes over the 2021 calendar year which will provide greater clarity on the cover available to business who have suffered loss of income related to the global COVID‑19 pandemic.

Due to the current legal uncertainties, Guild will be in a better position to consider individual claims at the conclusion of these proceedings. We will provide further communications at this time if we believe your circumstances may be impacted by these proceedings. Whilst no action is immediately required by you, you may of course lodge a claim with us. 

Should you wish to lodge a claim today, the information we require to assess your claim includes the following:

  • Policy number (we can help find this if you don't have it readily available),
  • GST details (e.g. ABN)
  • Whether an outbreak of COVID-19 has occurred at your business
  • How your business has been affected financially by COVID-19
  • The cause of any financial loss to your business, and 
  • Financial records of your business prior to closure, during closure and immediately following reopening.
You can lodge your claim online here, by calling your dedicated Guild Insurance Account Manager or call us on 1800 810 213.

 



Will my claim be finalised now as a result of this decision?

You may lodge any COVID-19 induced loss of income claim for consideration at any time. However, due to the current legal uncertainties, the processing of these claims will be delayed as a result of the ongoing appeals and legal processes.

Guild will be in a better position to consider individual claims at the conclusion of these proceedings. We will provide further communications at this time if we believe that your circumstances may be impacted by these decisions. Whilst no action is immediately required by you, you may of course lodge a claim with us.

Unfortunately given the circumstances, we are not currently in a position to give an expected timeframe for these decisions.



Can I make a complaint to the Australian Financial Complaints Authority (AFCA) while an appeal to the Test Case judgement is running?

Yes, you can make a complaint to AFCA, provided you are eligible to do so.

If your complaint relates to a policy that contains a Quarantine Act exclusion, AFCA has agreed to await the final resolution of the Test Case before considering how this may affect your complaint.



If my claim was previously declined, will the Test Case change this?

The outcome of the Test Case is that exclusions referencing the Quarantine Act cannot be enforced by insures to deny claims for COVID-19 induced losses. However, a number of policy triggers need to be met in order for your claim to be approved and we will need to reassess your claim in light of these triggers subject to application of other relevant policy exclusions, industry test cases and/or other legal processes. 



I have been financially impacted by COVID-19. Are support measures available?

Guild are committed to assisting our customers, especially those experiencing financial hardship through the COVID-19 crisis. We are providing a range of relief and support measures on a case-by-case basis.




Is my policy changing?

On renewal, all Guild Insurance policies now include an exclusion that means Business Interruption cover does not exist when an infectious disease is defined as a listed human disease under the Biosecurity Act 2015 (Cth).



My business does not operate in NSW. Will the Test Case affect my claim?

Guild and AFCA have agreed to follow the final determination of the Test Case when considering similar claims made by customers in other states and territories.

The Test Case is being decided by the NSW Court of Appeal, but it is likely that other courts would have regard to the Test Case if considering similar cases.

 

For further information on support measures offered by insurers in relation to COVID-19, please visit the Insurance Council of Australia’s FAQ page  here.

Please do not hesitate to contact your Account Manager, or a Customer Care Specialist by calling 1800 810 213 if you would like to discuss any of the above options.

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