Through the COVID-19 pandemic, review of insurance policy wordings currently used in the market has revealed the use of language that may be inconsistent with the application of policy conditions. 

To assist the whole insurance industry in reaching a better understanding of how the infectious disease exclusions in policy documents respond to the unique circumstances of the COVID-19 pandemic, the Australian Financial Complaints Authority (AFCA) and The Insurance Council of Australia (ICA) agreed to file a test case considering the application of infectious diseases cover in business interruption policies. 

The ICA announced on December 8, 2020 that an application for special leave is to be made to the High Court of Australia to appeal the decision of the New South Wales Court of Appeal. 

Insurers are generally not making any further claim determinations on the operation of the wordings in question until all legal processes have been concluded. 

There are multiple facets to Business Interruption policies potentially responding to COVID-19. These include, but are not limited to considerations around policy triggers of prevention of access, proximity and damage, as well as the policy exclusions being tested. 

Where a Knightcorp customer believes they have circumstances that may entitle a claim to be made we encourage you to contact our claims team to lodge a claim, as insurers will review claims on a case-by-case basis. Where a claim has already been submitted to our office, we will continue to monitor developments and work with your insurer on your claim. 

We will continue to provide updates as the information becomes available. As always, please feel free to contact the Knightcorp team on 1300 656 001 if you wish to discuss the above in further detail.