Victorian Covid-19 insurance claims from over 20 places head to court

The Transport Hotel has joined a raft of Victorian venues now suing insurers over continued denial of Covid shutdown claims.

Major Victorian pubs and restaurants are making claims for damages against their insurers.

It’s the latest salvo in the mounting court war over pandemic-related insurance claims from businesses that saw their operations affected by the Covid-19 outbreak.

Law firm Gadens has filed six claims in the Supreme Court of Victoria as part of almost 20 cases that will land in the court over the coming weeks in a bid to force insurers to pay up.

The firm is representing several Victorian pubs and restaurants, including Melbourne landmark the Transport Hotel, making claims for damages topping $20 million.

The Sovereign Hotel Group, which owns and operates the Transport Hotel, is seeking almost $7.2 million.

The court actions have been backed by litigation funders Courthouse Capital.

Courthouse Capital CEO ­Michelle Silvers said funding from the company would assist Melbourne businesses recover.

“There is little doubt that Melbourne’s hospitality industry bore the brunt of forced business closures during two shutdowns, resulting in significant losses in revenue,” Ms Silvers said.

Arch Underwriting, Caitlin Australia, AIG Australia, Chubb Insurance Australia, Berkshire Hathaway Specialty Insurance Company, Pen Underwriting, The Hollard Insurance Company, XL Insurance Company, Zurich Australia Insurance and Miramar Underwriting Agency will all be hit by claims resulting from the Gadens action.

The move comes after months of back-and-forth battles in the courts between insurers and insureds over insurance claims arising from business shutdowns and closures relating to the Covid-19 pandemic.

Police officers walk past a closed business on Bourke Street in Melbourne last October. Picture: NCA NewsWire/Daniel Pockett

Gadens partner Simon Theodore said his firm intended to continue the legal fight launched after the NSW Supreme Court found in favour of insured customers who held policies referencing the defunct Quarantine Act.

Lawyers for the insurance industry have appealed against that decision to the High Court.

The decision by the court opened the way to businesses making claims against insurers that had denied coverage.

“I’ve seen instances where certain clauses appear absolutely clear cut in the way they’ve been drafted, talking about the Quarantine Act instead of the Bio­security Act where there is no basis on which an insurer should be denying claims,” Mr Theodore said.

The Insurance Council of Australia has also launched a second round of test cases seeking to examine questions of pandemic coverage in business interruption insurance policies.

Major listed insurer QBE is also running a test case in the Federal Court examining a question of Victorian property law in a bid to determine whether claims from the virus-hit state should be accepted.

But Mr Theodore said he expected most of the policies he would bring forward to the Victorian Supreme Court dealt with different clauses and insurers than those in play.

Almost 40 businesses have lodged claims via Gadens.

Mr Theodore said the latest actions launched by his firm were not the last and encouraged businesses to come forward if they ­believed they had a valid claim.

“The hospitality businesses are still suffering and a lot may not survive the next few months unless they get the funds they need to keep them going,” he said.

Berrill & Watson director John Berrill said reaching a conclusion on business interruption insurance policies was long overdue.

“We’re in mid-2021 and test case number two is before a single judge,” Mr Berrill said.

“The single judge has to make a decision, that then gets ­appealed to a full court, then that gets appealed to the high court.

“It’s four steps and they haven’t even got through step 1.”