A judge has ruled in favour of insurers in the Federal Court of Australia in a second COVID-19 business interruption test case

Justice Jayne Jagot shared the summary of her judgment via a livestream. The ruling upheld the arguments advanced by insurers in eight of the nine matters in the test case.

In one matter the court found that the cover had been triggered but held that there were substantial issues as to whether the policyholder could prove any relevant business interruption.

In a separate case the Federal Court also ruled that insurers could not rely on a section of Victorian property legislation to exclude liability.

Andrew Hall, CEO Insurance Council of Australia, welcomed the judgment and said it was an “important step towards finalising these matters”. 

”Insurers, including those not directly involved in the court proceedings, are committed to applying the principles of the courts’ final ruling consistently and efficiently to all business interruption claims,” he said.

The Federal Court has set aside time in the second week of November 2021 for the Full Court to hear any appeal that may be filed by insurers or policyholders. 

Insurance Australia Group said in a statement that it would consider the potential impact of the judgment on its BI provision announced in November 2020.