Late on Wednesday, the NSW Court of Appeal rejected the insurance industry’s argument that policies should not cover losses suffered by its business clients due to COVID-19, sparking expectations of huge payouts on the horizon.
On Friday, the company responded to the judgment by announcing it would raise up to $750 million through a new share issue to strengthen its balance sheet. IAG remains adamant the intent of its business interruption policies is to not provide cover for any losses related to pandemics and says it is in talks with the Insurance Council of Australia about seeking special leave to appeal the judgment to the High Court.Melbourne’s retail heart, the Bourke Street Mall, was deserted after the pandemic forced the city into lockdown.
The ruling is confined to insurance policies that contain reference to the now repealed Quarantine Act 1908, rather than the Biosecurity Act 2015.