Quarantine Act and Your insurance policy

To our customers,

You may have seen in the press recently the decision handed down in the NSW Court of Appeal in a test case run by the Insurance Council of Australia (ICA) and Australian Financial Complaints Authority (AFCA) test case, with the court ruling in favour of the insureds.

It found that the quarantine disease cover restriction in business interruption policies that referred to the now repealed Quarantine Act, does not exclude cover for listed human diseases under the Biosecurity Act 2015.

Will there be an appeal?

The Insurance Council of Australia (ICA) has agreed that an application for special leave is to be made to the High Court of Australia to appeal the decision of the New South Wales Court of Appeal regarding the application of the Quarantine Act exclusion to business interruption policies.

According to the ICA media release dated 8/12/21, the ICA also intends to file a further test case that explores other policy issues foreshadowed with policyholders but not dealt with in the first test case, including proximity and prevention of access, and is working with stakeholders to finalise the parameters of this second test case.

Determinations on claims will only be made once the legal process is finalised.

What do you need to do?

If you have already submitted a claim under your Business Interruption policy, we will continue to monitor developments and work with your insurer on your claim.

If you have not lodged a claim under your Business Interruption policy, we suggest that you contact us so that we can discuss the process for lodging a claim notification.

Also, the decision only dealt with whether the insurer could rely on an exclusion which referred to the Quarantine Act. The court did not deal with whether any claim falls within the insuring clause. Only a handful of policies have this older Act.

We will continue to update you as more information becomes available. As always, please feel free to get in contact.

A copy of the ICA press release dated 8/12/2021 is enclosed
Stay safe.

Fred Nadde & Dino Di Giacomo
Steadfast Eastern Insurance Brokers