UK – FCA Test Case: The court has stated that judgment will be handed down at 10:30am on Tuesday 15 September 2020. The link to the judgment will be posted here.

Australia – ICA/AFCA Test Case: Business interruption test case to start on 2 October 2020

The test case launched by the Insurance Council of Australia (ICA) to examine the application of certain infectious diseases exclusions in BI policies will be heard by the New South Wales (NSW) Court of Appeal commencing on 2 October.

NSW Supreme Court Justice David Hammerschlag granted a joint motion by legal counsel to move the case to the court of appeal and expedited.

The ICA and the Australian Financial Complaints Authority (AFCA) agreed to file the test case in order to seek a decision from a superior court on whether references to a quarantinable disease under the ‘Quarantine Act 1908’ should be construed as a reference to a listed human disease under the ‘Biosecurity Act 2015’ in various policies issued to small businesses containing BI cover.

The test case consists of two separate small business claims that were lodged with the AFCA as part of its dispute resolution process. 

The ICA understands AFCA will use the outcomes of the test case in determining complaints arising in respect of business interruption claims with the infectious disease exclusion.

According to the ICA’s representative, in most cases, pandemic exclusions are a threshold issue given that most insurers have never contemplated coverage for pandemics, have not priced the risk nor collected premiums for this risk. Globally, insurers are said generally to regard pandemics as uninsurable risks.