On 25 June 2021, the High Court of Australia refused two insurers special leave to appeal the decision of the NSW Court of Appeal in HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296.

The NSW Court of Appeal unanimously held that insurers could not rely on an exclusion clause contained in certain policies to refuse indemnity for business interruption claims arising out of the COVID-19 pandemic.

The first test case does not mandate a blanket approach to policy coverage for all business interruption claims. Each will turn on the language of each policy wording and the circumstances of each claim.

Insurers have sought further judicial guidance on a number of other matters affecting the operation of business interruption policies in the context of COVID-19 in a second test case, due to be heard by the Federal Court later this year.

This article was originally published by the Law Society of New South Wales in the Law Society Journal, Issue 80 August 2021.

Click through to watch Holman Webb's first Insurance webinar of the year: 2020 - A Year in Review.

Presented by national insurance group leader John Van de Poll, this 50 minute webinar discussed a wide range of interesting and important insurance matters from 2020.

Discussion topics include:

• Business Interruption Insurance in a Pandemic 
  HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296
• Do security guards voluntarily assume the risk of an axe wielding intruder?
  Capar v SPG Investments Pty Ltd t/as Lidcombe Power Centre [2020] NSWCA 354
• Obvious Risk and Horse Riding 
  Tapp v Australian Bushmen's Campdraft & Rodeo Association Ltd [2020] NSWCA 263
• Nature and Conditions claims and Labour Hire 
  Bauer Media Pty Ltd v Khedrlarian [2020] NSWCA 288
• Credit Hire - Need and Reasonableness considered 
  Lee v Strelnicks; Souaid v Nahas; Cassim v Nguyen; Rixon v Arsalan [2020] NSWCA 115
• Disappointing Holidays 
  Moore v Scenic Tours Pty Ltd [2020] HCA 17

The business interruption test case in the NSW Court of Appeal has resulted in a decision favouring policyholders, rather than insurers.  

This test case has awakened insurers to the importance of obtaining regular legal advice in order to stay up to date with all relevant (and potentially problematic) legislative changes.