Travel agent fights insurers

MELBOURNE-BASED Meridian Travel has hit the headlines this week as one of nine small business plaintiffs seeking payouts under business interruption insurance policies.

Claims have been denied by insurance companies, which are fighting a Federal Court test case centring on the wording of their policies around the definition and timing of the COVID-19 pandemic.

Meridian Travel lodged its claim following the international border ban imposed by the Federal Government in Mar 2020, but a barrister appearing for insurance firm IAG yesterday claimed govt policies were not directly to blame for the losses incurred.

The “true cause” of Meridian’s drop in business was COVID-19 outbreaks in other countries, and the consequential drop in popularity of cruising as ships were linked to coronavirus.

These events “predate Australia’s border closure,” the lawyer said, meaning they were not covered by the IAG policy.

Other insurers involved in the case include QBE, Allianz, Swiss Re, Guild and Chubb Insurance.

The legal action is part of an ongoing push by the insurance companies to avoid business interruption payouts due to COVID-19, including an earlier NSW case over which quarantine and biosecurity law was referred to in policies (TD 23 Nov 2020).

Another travel industry plaintiff in the case, Educational World Travel, has ceased trading (TD 18 Dec 2020), but Meridian Travel’s Jodie Quick told TD the agency is still in business “and we don’t plan on going anywhere!”

Testimony has wrapped up, with the judge promising a quick ruling but also expecting an appeal.