AXIS Insurance Business Interruption Insurance Update
Updated February, 2022
AXIS understands that many policyholders experienced financial difficulties due to the Covid-19 pandemic. During this period, we have endeavoured to process all Business Interruption claims in a timely manner. We have endeavoured to ensure all business interruption (BI) claims notified to us have been processed in a timely manner.
If you would like to submit a BI claim, or have a question, please contact your broker or the firm that arranged the insurance for you.
Please see below for specific guidance regarding Covid-19 BI claims in the UK, Ireland and Australia.
Information For UK Policyholders
The Financial Conduct Authority brought a test case against a number of UK insurers in 2020. Although AXIS was not part of this case, we have applied the outcomes of this case in line with our policies’ terms and conditions.
AXIS provides regular reports to the Financial Conduct Authority on the progress we’ve made in processing these claims, which can be found here.
Information For Irish Policyholders
In assessing BI insurance claims in Ireland, we have implemented the Central Bank of Ireland’s Business Interruption Supervisory Framework, the Irish High Court’s findings in the FBD Test Case, and the Financial Services and Pensions Ombudsman’s decisions.
For more information on the FBD Test Case, please see the statement on the Central Bank of Ireland website.
Information For Australian Policyholders
1. Can I make a COVID-19 business interruption claim?
Given the uncertainties surrounding BI insurance policies in the context of COVID-19, the Insurance Council of Australia has sought clarity from the courts on the interpretation of BI insurance policy wordings. Clear guidance from the courts will help ensure greater certainty and consistency for insurers and policyholders in terms of what circumstances may trigger a claim to be paid under a business interruption insurance policy due to COVID-19. Two BI test cases have been heard in the courts to assist with determining various aspects of business interruption insurance cover.
2. Status of test cases
The first BI test case related to whether insurers could rely on references to the now repealed Quarantine Act 1908 (Cth) in order to exclude coverage. In June 2021, the High Court upheld the decision of the NSW Court of Appeal which determined that insurers could not rely on references to the Quarantine Act to deny liability in business interruption insurance policies.
The second BI test case is considering the interpretation of policy wordings regarding disease definitions, COVID-19 outbreak proximity, the impact of government orders, and various other policy wordings.
On 8 October 2021, the Federal Court of Australia handed down its decision on the second BI test case. In nine out of the 10 test cases, insurers were not liable to indemnify policyholders for claims under respective BI insurance policies as the relevant clauses were not triggered. In one test case, the court stated that the infectious disease insuring clause applied but was not yet in a position to find that the policyholder had proved that it was entitled to any indemnity.
Subsequently, policyholders appealed to the Full Court of the Federal Court on five of the test case matters. The appeal to the Full Court of the Federal Court concluded on 12 November 2021 and a judgment is anticipated in December 2021 or shortly thereafter.
There is a possibility that the parties to the second BI test case may make an application to appeal to the High Court of Australia on some or all of the Full Court’s findings. Any appeal may change the outcome of the court judgment.
3. What does this mean for me?
AXIS is committed to applying the reasoning of the final judgment in the test cases in its assessment of claims. As a result, AXIS is not in a position to finalize its assessment of any BI insurance claims relating to issues in the second business interruption test case until a final non-appealable judgment has been delivered.
4. What should I do?
If you believe that you may have a claim under your BI insurance policy, please consider lodging a claim. You can also speak with your insurance broker about your circumstances. Each claim will be reviewed according to the terms of your BI insurance policy and the information you provide in support of your claim and evidence of the value of your loss. To this end, if you make a claim, we will contact you setting out the minimum information we need to assess your claim.
5. Further information
For more information regarding the BI test cases, please contact your broker or read the Insurance Council of Australia’s BI Frequently Asked Questions.