Things to consider when making a business interruption claim

Things to consider when making a business interruption claim

Where you have purchased business interruption insurance and you believe you have suffered a loss as defined by your policy, you can consider lodging a claim.

Each claim will be reviewed subject to your business interruption insurance policy and your ability to demonstrate a loss that falls within the scope of cover provided and evidence of the value of the loss being claimed before a claim can be paid.

Where the loss does not fall within the scope of cover then the claim will not be paid.

Questions to Consider

Please provide evidence. This can include:
  • Health authority advice
  • Emergency professional cleaning invoices

If the confirmed Covid case was not at your premises, you will need to be able to identify where the COVID-19 case was in relation to your business. As it currently stands, the judgment in the second BI test cases means that a confirmed Covid case within the vicinity limit may not trigger the insuring clause (see below).

Examples of businesses mandated for closure include pubs, licenced clubs, gyms, indoor sporting venues, restaurants, cafes and beauticians.

Please provide you previous 12 months sales data prior to the date of loss, and 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
  • Has your business received any government benefits? e.g. JobKeeper
  • Details of all rental relief provided by your landlord.

The High Court’s decision in June 2021 means insurers cannot rely on references to the Quarantine Act 1908 (Cth) to deny liability in policies written in the same terms as the policies considered in the first test case.

However, on 8 October 2021 the Federal Court handed down its decision on the Second Business Interruption Test Case, finding that, in 9 out of the 10 test cases, insurers were not liable to indemnify customers for their claim under the respective business interruption covers as none of the rele-vant clauses were triggered.

The decision is subject to appeal before the Full Federal Court and has been scheduled for hearing 8 November to 16 November 2021. We will need to await the outcome of the appeals in the Second BI Test Case before finalising Allianz’s position on claims.

Allianz will respond to affected customers who have lodged business interruption claims on a case-by case basis, however the vast majority of claims may not be able to be finalised until the outcome of the appeal in the second test case is known.