Last year, Lavan reported on a NSW Supreme Court of Appeal decision (HDI Global Specialty SE v Wonkana No. 3 Pty Ltd  NSWCA 296) concerning “business interruption” in insurance policies (see here).
By way of brief summary, some insurers had not updated the reference from Quarantine Act to Biosecurity Act when the Quarantine Act was repealed. Those insurers had argued they were not liable to cover “business interruption” losses arising as a result of the COVID-19 pandemic because the insurance policies excluded from the definition of business interruption cover “diseases declared to be quarantinable disease under the Quarantine Act 1908 (Cth) and subsequent amendments”. The issue arose because the Quarantine Act had been repealed and had therefore not applied since 16 June 2016, when the Biosecurity Act 2015 (Cth) (Biosecurity Act) came into place (which, aside from being a different piece of legislation, does not contain a definition of “quarantinable disease” but rather, refers to “a listed human disease”). The insurance companies claimed that the policies should be read to mean/include “a listed human disease” under the Biosecurity Act.
This case is an important reminder to both insurers and insureds to seek legal advice on a regular basis to ensure that policies remain current and applicable. It is also important to point out that just because the application for special leave was dismissed, this does not mean that insureds will automatically have a claim under any policy referring to the Quarantine Act in the context of business interruption insurance. It is likely that certain other more specific exclusions and conditions may apply, such the cause of any loss and whether there has been a governmental order that the company cannot trade or whether the company elected not to trade for commercial reasons.