Australia markets open in 4 hours 53 minutes

    -32.00 (-0.47%)

    +0.0033 (+0.45%)
  • ASX 200

    -35.30 (-0.53%)
  • OIL

    -0.18 (-0.39%)
  • GOLD

    -23.10 (-1.28%)

    +424.02 (+1.76%)
  • CMC Crypto 200

    -4.23 (-1.25%)

Insurers talk down COVID-19 claim ruling

Steven Deare
·1-min read

Insurers say they are not at risk of a torrent of COVID claims, despite a court ruling that businesses crippled by the pandemic should receive compensation.

Insurers including IAG, QBE and Suncorp on Thursday were talking down a NSW Court of Appeal decision that insurers could not deny coronavirus-related claims, creating the possibility of huge costs for the companies.

Lawyers for businesses said insurers had advised customers that losses from the virus could not be claimed as the disease was a quarantinable one, under the Quarantine Act of 1908.

Yet the lawyers successfully argued this was not the case.

The impact of the decision was unfolding on the Australian share market.

Before the market opened, IAG suspended trading of its shares.

The company said it would assess the financial impact of the judgement.

QBE, which also offers business interruption insurance, said its policies required a number of triggers to be met in order for customers to claim.

QBE said these claims in Australia were likely to be limited to $5 million per claim.

Suncorp said the court decision did not mean COVID-19 claims would be automatically covered for policies mentioning the Quarantine Act.

Customers' individual circumstances needed to be considered, it said.

Shine Lawyers commercial disputes practice leader Michael Lalji was not involved in the case but gave a different view.

"I expect this decision will open the floodgates to a lot of claims and cost insurers a lot of money," he said.

The Insurance Council of Australia will consider appealing to the High Court.

QBE shares were down 3.65 per cent to $10.03 at 1458 AEDT.

Suncorp shares were down 3.55 per cent to $9.37.