Important update regarding COVID-19 Business Interruption Cover

LAST UPDATED: 22/02/2022

If you run a business and hold business interruption insurance with Guild Insurance, we’ve got an update for you. There’s been a recent development in the Federal Court of Australia that provides more clarity on whether your policy covers you for business interruption losses from the COVID-19 pandemic.

On 21 February 2022, the Federal Court of Australia delivered its judgement in the Appeal of its original judgement of 8 October 2021 in the second business interruption test case (‘Test Case Appeal’).

The Test Case Appeal was brought to the court by five different policyholders regarding claims for business interruption losses stemming from the COVID-19 pandemic. Guild Insurance participated in the October test case hearing, seeking determination on two claims. After these proceedings, the Federal Court upheld Guild Insurance’s position that Business Interruption cover issued by Guild Insurance did not respond to their COVID-19 related losses.

While the two Guild Insurance policyholders did not appeal the Court’s decision, we’re committed to providing clarity to all of our policyholders and keeping you up to date with issues and arguments raised in the Test Case Appeal that are relevant to your cover.

The Test Case Appeal largely dismissed the appeal by policyholders on the matters with relevance to the cover provided by Guild Insurance, which has reinforced that Business Interruption cover issued by Guild Insurance does not respond to COVID-19 related losses, other than in specific circumstances (such as when a business was ordered to close due to an outbreak of COVID-19 within their business premises).

Guild remains dedicated to promptly assessing and paying claims if cover is available. If you're unsure about your business insurance coverage, or if you believe you have a valid COVID-19 related business interruption claim, then please either call us on 1800 810 213 or lodge a claim here if you have not already done so.

Please note that all Guild business policies were updated by around April 2021 to be clear that they do not cover any COVID-19 related losses.

We understand that our customers are experiencing difficulties due to COVID-19 interruption and that some businesses have unfortunately been heavily affected. In these cases, we encourage you to contact your Account Manager or call Guild on 1800 810 213 to discuss your situation, so we can review and align your cover and premium with your current business circumstances.

We wish you and your staff the very best through this challenging period and will keep you updated on any further developments.



On October 8 2021, the Federal Court of Australia delivered its judgement in the second business interruption test case brought by the Insurance Industry to provide clarity on the availability of Business Interruption cover for COVID-19 related losses. As a participating insurer, Guild Insurance had two claims included to provide certainty around our cover.

The ruling upheld key arguments advanced by insurers and determined that Business Interruption cover issued by Guild Insurance does not respond to COVID-19 related losses. The judgement is however complex, and the court ruling upheld the arguments of policyholders in some matters. It will take us some time to analyse and understand the implications for all Guild Insurance’s customers. It is also expected that the findings of the court will be appealed.  The Federal Court has already scheduled time for this to take place in the week beginning 8th November, with a judgement in early 2022, enabling all insurers, including Guild Insurance, to provide increased clarity of cover available to policyholders at that time.

We will provide a further update in the coming week once we have had an opportunity to consider the judgement and determine our next steps. Guild remains committed to promptly assessing and paying claims where cover is available. We encourage all policyholders who believe they have a valid Covid-19 related claim under their business interruption cover to lodge a claim if they have not already done so. Claims can be lodged online or by phone at 1800 810 213.

We have also created further information of some frequently asked questions we've had from customers on dealing with covid-19 in your profession



The impacts of COVID-19 are continuing to be felt across the business community. Some businesses are still temporarily closed, others are operating in a different capacity, and some are seeing a sharp increase in demand for their products and services. As your business changes, it's important to keep your policy up-to-date.

Guild Insurance remains committed to supporting its customers during this difficult and challenging period. This commitment includes prompt assessment and payment of claims where coverage is available.

If your business has been impacted by COVID-19 you may be able to make a claim under your Business Interruption Cover. This will depend on:

  1. The type of policy that you had at the time your business was impacted by COVID-19;
  2. The circumstance of how your business was impacted by COVID-19, including the proximity of an outbreak to your business, and / or prevention of access to your premises due to a government mandate; and
  3. The outcome of current legal proceedings.

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 at any time.

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 may be delayed as a result of the legal processes.

Guild will continue to consider claims on a case-by-case basis as we have throughout the pandemic. You will not be prejudiced by a decision to wait to make a claim until after the legal cases are resolved. You will also not be prejudiced if you make a claim and your claim is denied.

Update on Legal Proceedings

There are three legal proceedings that have been undertaken by the insurance industry to determine how policies respond to the impact of COVID-19.

The First Test Case was to determine whether insurers could rely on exclusions that referred to the Quarantine Act rather than the Biosecurity Act. The High Court has denied the insurance industry’s application for leave to appeal the NSW Court of Appeal’s decision on pandemic exclusions.  This means that Guild cannot rely upon exclusions that referred to the Quarantine Act in relation to claims for loss resulting from COVID-19.

Guild will consider the impacts of this decision on our customers that have already lodged claims though anticipate few, if any claims will be able to be finalised until further clarity is provided in the second test case.

The Second Test Case is being undertaken to determine the application of further issues of pandemic coverage in business interruption policies. Guild and the insurance industry have a clear view on when cover should be available for infectious diseases. This view has been challenged and is currently the subject of multiple disputes before the Australian Financial Complaints Authority (AFCA), as well as litigation through the court system. This case will determine the meaning of policy wordings in relation to the definition of a disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate, as well as policies that contain a hybrid of these type of wordings such as Guild’s.

As a participating insurer, Guild has agreed with AFCA and the relevant customers to nominate two claims for consideration by the Federal Court. These claims will help provide clarity around Guild’s specific wording and will provide both the insurer, participating customers, and all policyholders certainty and clarity around our specific situation and wording. It is important to note that through this arrangement, Guild is covering the legal costs incurred by our participating policyholders.

The third legal proceeding relates specifically to business interruption in Victoria.  This case is known as QBE v Coin and is to determine whether references to the Quarantine Act should be treated as a reference to the Biosecurity Act for businesses insured and domiciled in Victoria. The case was originally listed for hearing in the Federal Court but was subsequently joined to the Second Test Case.

The hearing for the Second Test Case commenced in September with an initial judgement anticipated to be handed down in late October. An anticipated appeal is scheduled for November in front of the full bench of the Federal Court with judgement anticipated prior to Christmas.


How does this impact my policy?

The NSW Court of Appeal decision on policy exclusions for Business Interruption covers may have an impact on your policy. If you hold one of the below policies, please proceed to the relevant page to see how you may be impacted.

To see how this affects you, if you have a Pharmacist or Early Learning Business Insurance policy, click here.

If you have an Industrial Special Risks, Veterinarian, Speech Pathologist, or Dietitian Business Insurance policy, click here.

If you have a Dentist, Chiropractor, Osteopath, or Podiatrist Business Insurance policy, click here.

Or, if you are from another profession with a Guild Business Insurance policy, click here.

If you do not hold one of the above policies, then this update will not be relevant for you.


Why is Guild taking this course of action?

We understand that many businesses across Australia have been impacted by the events of 2020. Our policies are designed to reflect the unique needs of our customers, including those in the Allied Health and related professions, and the unique infection control situations they may face in everyday practice. In some cases, the recent COVID-19 pandemic resulted in differing views over the application of our business interruption cover. Our key objective is to provide as much clarity as we can for all our policyholders with as little impact on them as possible.

We’re choosing not to hide, or to have our customers face uncertainty while the industry attempts to work through these unique issues. By being proactive and transparent throughout these issues, and to help facilitate the process with our participating customers, we’re aiming to provide the most certainty we can in the most cost-effective manner as possible.

Find out more

To find out more about the test case, you can visit the Insurance Council of Australia’s Business Interruption page, read their frequently asked questions which are being updated as more information comes to hand.