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Business Interruption Insurance for COVID-19

Announcement: Business Interruption Insurance for COVID-19 – Successful Full Court of the Federal Court of Australia Decision

LGM Advisors is pleased to advise that we have received a successful judgment in the Full Court of the Federal Court of Australia on a separate question relating to business interruption insurance for COVID-19, against AAI Limited trading as Vero Insurance (a subsidiary of Suncorp).

Our client, a family-owned café in Melbourne, made a claim for business interruption insurance after suffering significant losses as a result of the Victorian directions made under the Public Health and Wellbeing Act 2008 (Vic) this year.

The matter, heard by the Full Court of the Federal Court on an expedited basis, in summary asked whether it was sufficient for a business interruption exclusion clause to exclude coverage for loss or damage caused by COVID-19, with reference to the Biosecurity Act 2015 (Cth). The question was answered by the Court in the negative.

The judgment, handed down on Friday 18 December 2020, marks a significant step forward to assist businesses to recover and withstand these unprecedented times.

The decision may be accessed using this link. A related case was made in the New South Wales Court of Appeal. That decision may be accessed on this link and addresses a different wording in the business interruption insurance policy. The ruling has led to IAG raising $750 million in capital in preparation for claims the insurer said it had not intended to cover. Suncorp, meanwhile, has said it put aside $195 million to pay for claims arising from the adverse ruling.

Some media releases relating to the proceedings may be accessed through the Australian Financial Review and the Australian.

LGM Advisors is currently investigating the potential to make further claims. Many businesses have had their business interruption claims rejected and told that their policies do not apply if it relates to the COVID-19 pandemic. It appears that some insurance companies have advised claimants that they are unable to make claims.

For a free, no-obligation evaluation of your insurance policy please email us at