Business Interruption claims

Has your business been impacted by COVID-19?

COVID-19 led to many challenges for our business customers. If you believe your circumstances entitle you to claim under your Business Interruption (BI) cover, then you should consider lodging a claim.

If you’re waiting for the determination of a BI claim or a resolution of a dispute, learn more about why this might be taking longer than expected.

If you need any support with the claims process, give us a call and our friendly team of consultants will be happy to help.

Since mid-2021, the Insurance Council of Australia (ICA) has been conducting a series of court ‘test cases’ to clarify the circumstances that would trigger a claim to be paid under BI cover due to COVID-19. For some of our customers, this has meant there’s been a delay in reviewing and determining claims. We understand this may cause concern, so we’ll try to keep you informed of the ongoing situation.

The first BI test case took place in June 2021. The NSW Court of Appeal found insurers couldn’t rely on pandemic exclusions contained in BI coverage that reference the repealed Quarantine Act 1908 (Cth).

The second BI test case sought to obtain clarity on a number of policy issues such as:

  • How the definitions of infectious disease are to be interpreted in policy wordings
  • What constitutes a COVID-19 outbreak
  • How the proximity requirement is to be interpreted
  • The impact of government orders and other mandates
  • Other policy wording matters

On 21 February 2022, the Full Court of the Federal Court substantially upheld the conclusions reached by the Federal Court in the second BI test case. Unless this finding is overturned in the High Court (see next steps below), this means that in the factual circumstances set out in test cases, the relevant insuring clauses won’t be triggered. This means there may be no cover under the policy for these types of claims.

On 4 August 2022, the High Court advised it would grant an oral hearing of three special leave applications to appeal the Full Court of the Federal Court’s recent judgment. A date has not been set for the hearings; however, it may be another 12 months before a final decision is made.

We appreciate your patience while these matters are resolved. Clear guidance and agreement by the courts is essential in determining how we’ll interpret and apply the relevant policy wordings to BI claims.

We’re committed to supporting our customers through the claims process, and assessing claims as quickly as we can once the final judgement is received.

For up to date announcements and information regarding BI test cases, visit the Insurance Council of Australia website.

If you believe your circumstances entitle you to claim under your Business Interruption cover, you should consider lodging a claim. Learn more about making a claim or give our claims team a call on 13 10 13. If you have a broker, contact them for more information.

Each claim will be reviewed subject to your BI Insurance cover. Before a claim can be paid, you must be able to demonstrate a loss that’s covered by the policy. We’ll also need evidence of the value of the loss being claimed.

If the claim gives rise to one of the issues that has been appealed to the High Court in the second BI test case, we may be unable to finalise the claim until the final judgment is received.

If the loss doesn’t fall within the scope of cover, the claim won’t be paid.

A COVID-19 case or outbreak can disrupt your business in a range of ways. These can include:

  • A confirmed case of COVID-19 at the insured premises that interferes, interrupts or requires the business to close
  • A closure because of a known COVID-19 case within the vicinity limit (as detailed in the PDS e.g. 20km) of the premises
  • A closure because of a confirmed COVID-19 outbreak in the vicinity of your business

In all these instances, we’ll need you to provide evidence. This can include:

  • Health authority advice
  • Emergency professional cleaning invoices

If the confirmed COVID-19 case wasn’t at your premises, you’ll need to be able to identify where it was in relation to your business. As it stands, the judgment in the second BI test cases (including the appeal to the Full Court of the Federal Court) means that a confirmed COVID-19 case within the vicinity limit may not trigger the insuring clause.

Examples of some of the types of businesses that were mandated for closure or partial closure include pubs, licensed clubs, gyms, indoor sporting venues and beauticians.

Your business may have had to change its trading hours. Or, you might have modified the business to allow you to trade under COVID-19. E.g. operating as a window-only or takeaway-only business.

Whatever changes were made, provide us with your previous 12 months sales data prior to the date of loss, as well as sales data during the loss period.

Financial information to prepare includes:

  • Quarterly business activity statements
  • Monthly/annual profit and loss statements
  • Monthly payroll summary reports by employee
  • Supporting invoices for increased/additional costs incurred to mitigate loss or maintain business operations
  • Evidence of any government benefits your business has received, e.g. JobKeeper
  • Details of all rental relief provided by your landlord
We’ll respond to affected customers who have lodged Business Interruption claims on a case-by-case basis. However, we may not be able to finalise the vast majority of claims until the outcome of any further application for leave to appeal to the High Court in the second test case is known.
Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past, present and emerging.

Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits and exclusions apply. 

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered on this website.
Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered on this website.