Leading litigation funder, ICP has announced plans to fund collective action on behalf of thousands of business-interruption (BI) insurance policyholders against insurers that have knocked back claims for losses incurred by forced Covid-related closures.
It follows a NSW Court of Appeal ruling in November in a test case that insurers could not rely on standard “quarantinable disease” exclusions when knocking back claims for losses caused by Covid-19 under business interruption (BI) policies. Insurers had incorrectly asserted that the exclusion was a “pandemic exclusion” and the Court found that it did not apply to Covid-19.
Supporting the proposed ICP action is a decision handed down by Britain’s highest Court, the Supreme Court, which upheld earlier UK Court rulings affirming the ability of UK businesses to make BI claims related to Covid-19 closures. UK legal precedents are relevant to Australian legal proceedings.
ICP is asking all businesses that suffered Covid-related financial losses to submit their BI insurance policies for review before registering interest in the joint response to insurers.
Top-tier law firm Clayton Utz will be engaged to advise individual businesses on whether they have a basis for pressing their BI claim and should consider joining in the collective action.
ICP managing director, John Walker said: “Covid-19 cut a swathe through the livelihoods of thousands of business owners who, through no fault of their own, were forced to close for extended periods. If they have valid claims for business-interruption losses, then insurers need to step up, not deny and delay payment.
“Our message to business owners is do not take your insurer at its word when it says you’re not covered for BI losses – check your policies closely and get independent advice.
“ICP is offering an efficient way for businesses to have policy wordings reviewed by insurance law experts at Clayton Utz, at no charge to the business. If their BI claim looks valid, they then have the option of joining our collective process to have claims resolved.
“We intend to engage constructively with insurers to see if claims can be resolved without the need for litigation but if that is necessary, Clayton Utz will act for the lead applicants in those proceedings.”
The ICP offer is applicable to businesses that:
- Have not made a BI claim but held BI insurance before and during Covid-19
- Had a BI claim linked to the Covid-19 pandemic rejected by an insurer
- Made a Covid-19 BI claim that was accepted but with an unreasonable pay-out
- Have not yet claimed for BI losses because they had been advised by an insurer or broker that BI claims arising from Covid-19 pandemic were not covered.