NQ bar in Covid court case

A TOWNSVILLE bar is at the centre of a landmark court case that will determine if insurers must hand over billions to businesses disrupted during the Covid-19 pandemic.

Flinders St craft beer bar The Taphouse is one of nine small businesses that will have their insurance policies put under the microscope to establish a consistent industry approach.

The case, which was heard before the Federal Court in early September, will clarify in what circumstances businesses can make claims.

The Taphouse claimed an undisclosed amount from its insurer Insurance Australia Limited in March 2020 through its business insurance policy claiming losses suffered during the coronavirus pandemic.

The bar claims it suffered a reduction in trade due to a series of government directions, which imposed trade restrictions. The bar was closed for less than a week after chief health officer Jeannette Young declared a public health emergency across the state last year.

At the time, 319 Covid cases were recorded in Queensland with one case in Townsville.

Court documents say The Taphouse’s policy did not provide general cover for a pandemic, while its insurer also claims that the policy did not protect for the impact of government regulations.

Court documents say the policy included clauses that protected for the “outbreak” of an infectious or contagious disease within 20km and further covered interruption to business caused by any “legal authority” preventing, restricting or evacuating access to the bar due to damage, or threat of damage, to property or persons within a 50km radius.

The insurer denied the claim on grounds the Queensland government orders did not constitute a “legal authority” and that access to the premises was not prevented or restricted. Among other things, the insurer further submitted government regulations were not the result of an “outbreak” of the virus within 20km.

The parties disagree on the meaning of terms found in the policy including outbreak, closure or evacuation and prevention of access.

Lawyers representing The Taphouse argued among other things, that the term “evacuation of the public” included in the policy did not just include physical closure or the removal of patrons from the premises, but also covered the restriction of access or use of the property as required under government orders.

Insurance Council of Australia chief executive Andrew Hall said members were committed to applying the courts’ rulings in an “efficient, transparent, and consistent” way.

The case is the second pandemic insurance test case after the NSW Court of Appeal ruled in favour of policyholders in 2020.

The court is expected to hand down its findings before the end of the year with a potential appeal to be heard by a panel of three or more judges of the Federal Court.