The New South Wales Court of Appeal has recently handed down a decision that looked into Business Interruption insurance cover and whether COVID-19 related interruptions would be included or excluded.

Business Interruption insurance cover historically includes exclusions for losses relating to quarantinable or infectious diseases that were applied globally to insurance policies, specifically following the SARS virus.  The reason for this is the significant impact the mass claims would have on the financial sector.

Interestingly, the New South Wales Court of Appeal found in favour of the policy holders, not the insurance companies.  On 18 November 2020 it was determined that COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act and therefore, the Quarantine Act carve-out does not apply as an exclusion.

The parties have until 16 December 2020 to seek special leave to appeal to the High Court of Australia.

Stacey Brennan
Lawyer & Chief of Staff