Insurer QGIF to cut cover for Covid leaving Queensland to pay pandemic claims

Queensland’s insurer for state-owned galleries, theatres and tourist authorities has declared it will stop providing coverage for pandemics.

Brisbane’s Southbank Corporation has claimed almost $30m to cover losses arising from the pandemic. Picture: Peter Wallis

Queensland’s insurer for state-owned galleries, theatres and tourist authorities has declared it will stop providing coverage for pandemics after facing $61m in Covid-linked claims.

Queensland Government Insurance Fund was hit with $51m in claims stemming from Covid- lockdowns last financial year, and has warned $10m of payments are not finalised from last year.

However, on July 1 QGIF ceased providing coverage for Covid-19, leaving the state’s government institutions vulnerable to losses stemming from the pandemic.

The table of claims reveals the Queensland Performing Arts Centre received $16.8m in payments from the insurer last year.

The Southbank Corporation, which maintains and manages the riverside precinct in Brisbane, has received $23m in funds from the insurer, with another $9m set to still flow.

The Queensland Museum has put in a $3m claim, but only received $2.45m so far.

The Queensland Art Gallery has received $3.8m.

While most commercial insurers have mounted legal ­arguments that they don’t pay for pandemics, the Queensland Government Insurance Fund had noted that the policies ­previously sold to government institutions did not include a carve-out for communicable diseases.

However, QGIF has moved to end coverage, despite the agency noting last year it would cover Covid claims.

Government institutions which had been sold property insurance with QGIF were told the insurer would “pay the reasonable additional expenditure incurred by the agency including those incurred in resuming or maintaining normal business operations or services such as the costs associated with hiring alternative premises”.

The stance of the Queensland state insurer comes as NSW revealed its insurance bill for the pandemic had blown out to $176m by June of this year.

This was up on the $76m NSW’s Treasury Managed Fund had paid by November last year.

NSW and Queensland’s lenient stance is at odds with the hard line approach by the Victorian government insurer, which had paid $15,000 in one claim as of January this year.

The $227m payouts from the NSW and Queensland government insurers come as the Australian general insurance industry is embroiled in an ongoing battle in the courts over coverage.

The industry lost its first attempts to block claims arising from the pandemic when the High Court threw out its appeal.

However, a second test case is under way in the Federal Court, with a hearing of an omnibus of insurance claims.

Tony Morris QC, acting for Brisbane-based Market Foods – one of the insured businesses in the test case – recently told the court insurer Chubb was seeking to challenge claims linked to Covid-19 lockdowns.

“We’ve had a lack of success in getting agreement as to what the facts are,” he said.

Mr Morris said Chubb was blocking attempts to submit statements from Queensland Health regarding outbreaks of Covid-19.

“In relation to the 1 William Street and Royal Brisbane Hospital sites, we have set out, pleaded and relied on public statements made by Queensland Health,” he said.

“Chubb will not agree that the facts made in those public statements are true, so we’re left in the position of having to prove that there was actually transmission in the vicinity of the Royal Brisbane Hospital.”