Pandemic claims on hold

THE second business interruption case regarding insurance claims related to the COVID-19 pandemic has been completed, but pharmacies which have made a claim will need to wait until yet another appeal hearing to know if they are covered.

The latest Federal Court ruling which was handed down last

Fri found in favour of insurers including Guild Insurance, Allianz, Chubb, IAG, QBE and Swiss Re.

Guiseppe Carollo, CEO of pharmacy insurance specialist Carollo Horton, said the ruling meant “many insurance policies are unlikely to provide cover for business interruption as a result of the COVID-19 pandemic”.

The test case involved nine small businesses operating in various sectors and locations, with Justice Jayne Jagot saying other than in one case (relating to IAG and a travel agency called Meridian Travel) “I have concluded that the insuring clauses do not apply in the circumstances of each case”.

Carollo said frustration at the lack of certainty around the delayed decisions was understandable.

“Once insurers have the final rulings, they will be consistently applied when assessing a claim for business interruption related to the COVID-19 pandemic and claims will be made a priority,” he said.

“Due to pharmacies being able to trade throughout most of the pandemic with some restrictions, the claim will need to be assessed not only against the policy but also around certain circumstances and how the pharmacy traded during the period,” Carollo added.

“Your insurance broker should guide you through this process.

“Pharmacies play an important role in the communities they serve, and especially now during the pandemic .... some pharmacies have been more affected than others, so each claim for business interruption needs to be transparent and consistent,” he said.

The new appeal is expected in early Nov, and pharmacies which have made a claim will need to wait until the final appeal to know if they are fully covered.