IAG hit with class action

IAG has been served with a pandemic related business interruption insurance class action on the same day a marathon legal test case set to provide rulings on many of the same questions kicked off.

Slater and Gordon filed the class action against the listed insurer on September 3 but papers weren’t served on IAG until Monday.

The class action, filed on behalf of Melbourne hospitality business CMC Hospitality and group members, seeks to force IAG to pay customers who have been unable to secure payouts for pandemic related claims.

CMC Hospitality owns and operates two bars in Melbourne’s suburbs of Williamstown and Seddon.

IAG noted the filing in a market update on Monday, pointing to the two week federal court fight over business interruption insurance claims.

“IAG is participating in the industry test case, which it believes is the most efficient process to obtain clarity and to resolve issues for customers with business interruption claims,” the business said.

“IAG intends to follow the final rulings of the courts and assess any business interruption claims as quickly as possible following the final resolution of the issues in Court.”

The insurer has provisioned $1.15bn to cover business interruption claims related to the pandemic.

IAG shares rose 5c to $5.45.