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Australian insurance companies are being taken to task with a number of COVID-19 payout class action lawsuits alleging they failed to address claims in a timely manner.
At least five law firms are in the midst of investigating claims by consumers who say that their business interruption insurance claims have been wrongly denied, according to Insurance Business. Australian business owners also say that they have been suffering as insurers take as long as possible to make a COVID-19 payout.
“Every time I’ve made a claim, they’ve waited to the last possible day to respond,” a bicycle shop owner who says he saw revenues drop by 95% during the coronavirus outbreak told ABC News reporters.
Australian business owners are vowing to fight for the compensation they’re entitled to, but insurance companies say the estimated $10 billion in liabilities may be more than they can pay.
“Our policies weren’t written or designed to provide cover for a pandemic, so we need clarification on how they should be interpreted in light of the impact of COVID-19,” an insurance industry spokesperson told ABC.
Experts say that the devil is in the details regarding the terms of the business interruption insurance policies they sold to Australian business owners.
“If they did not intend to cover pandemics, then to a certain extent I feel sorry for them, but that does not alleviate their legal obligations to the insured,” Investor Claim Partner litigation funder John Walker told ABC reporters.
“It is seen by the insurance industry as a stuff up and they’re wanting the insured to pay for their stuff up,” he continued, noting there had been negligible claims paid out since the beginning of the pandemic.
Insurance Companies Lose Test Case
The Australian Financial Complaints Authority and the Insurance Council of Australia reportedly took a test case to the New South Wales Court of Appeal earlier this year. Two insurers insisted that their business interruption insurance policies contained a pandemic exclusion that excused them from COVID-19 payouts.
The appeals court dismissed the insurers’ arguments, according to Insurance Business Australia.
“COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth), and the exclusion in the HDI Disease Benefit [and the Hollard Disease Cover are] not enlivened,” concluded the court.
The Insurance Council of Australia is reportedly planning to appeal this decision to the High Court of Australia.
Have you made a business interruption insurance claim during the pandemic? Did you receive a COVID-19 payout from your insurer? Let us know what happened in the comment section below!
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