There is good news for businesses with business interruption insurance.
The denial from insurance companies of business interruption claims linked to COVID-19 based on fine print has left many not only angry and frustrated, but has led to economic hardship and failure of many small businesses.
Recently in a win for businesses, the High Court of Australia denied the Insurance Council of Australia’s (ICA) (who represent Insurance Companies in Australia) application to appeal a judgment in the first test case on COVID business interruption claim denials.
Two test cases have been running in the Supreme Court over recent months and thanks to this first ruling it now appears that insurers will be obliged to pay claims associated with COVID-19.
The decision to deny the special leave application solidifies the NSW Court of Appeal's decision last year that insurers can't rely on exclusion wordings citing the Quarantine Act and subsequent amendments to deny claims for COVID-19 related disruptions.
What does this mean for you?
This is an important decision for any business trying to seek a business interruption insurance claim as a result of COVID-19.
If you have been affected and are intending to claim through insurance you will need to provide detailed proof of your loss, which is now more complex due to government benefits such as Job Keeper and the COVID Disaster Payment. Most businesses will require assistance to provide the relevant documentation and proof required to substantiate your losses to your insurer.
What should your next steps be?
If your business interruption claim was previously denied, you should aim to start the process again as soon as possible.We’re available to assist you to compile the relevant documentation and to make the necessary steps to start your claim process.
Please contact the office at email@example.com where we can advise you on next steps.
You don’t have business interruption insurance but you have suffered financial hardship due to COVID-19?
A new jointly funded package from the Commonwealth and Victorian Governments will give Victorian small and medium businesses extra support to recover from the most recent lockdown.
COVID-19 Disaster Payments
Businesses that do not qualify for Victorian Government support programs because they are not registered for GST will be eligible for support through the Commonwealth’s COVID-19 Disaster Payment.
The COVID-19 Disaster Payment payments will be administered through Services Australia, with Victoria assuming responsibility to fund payments in areas that have not been declared a hotspot by the Commonwealth.
Business Costs Assistance Program
Under the new State-Commonwealth business support package more than 90,000 businesses will be automatically paid a Business Costs Assistance Program Round Three grant of $2,800 – an allocation of $266 million.
Alpine Business Support Program
Alpine businesses will receive between $5,000 (off-mountain) and $20,000 (employing businesses, on mountain) under a $10.6 million extension of the Alpine Business Support Program.
Closing date - 20 August
Small Business COVID Hardship Fund
Some $54 million will be added to the Small Business COVID Hardship Fund announced last week, allowing grants of up to $8,000 to be paid to small businesses that are not eligible for support under existing programs and have experienced a 70 per cent reduction in turnover.
Closing Date - 10 September