Hospitality goes to war with insurance over unpaid claims
COVID-19 affected businesses in Victoria are going to war with their insurance companies.
Almost 20 cases will be brought before the Victorian Supreme Court, with law firm Gadens filing six claims already.
Gadens is representing several of the state’s pubs and restaurants, including Melbourne’s Transport Hotel.
The firm is making claims for $20 million in damages against insurance companies that have so far failed to honour claims.
Transport is owned by the Sovereign Hotel Group, which is seeking almost $7.2 million in damages.
Litigation funders Courthouse Capital is backing the court actions, with CEO Michelle Silvers saying that action would help 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.
Insurance companies set to be hit by claims are: 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.
As the Herald Sun reports, Victoria’s battle comes 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 lodged an appeal against the decision in the High Court.
“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,” Gadens partner Simon Theodore said.
Gadens has lodged claims for almost 40 businesses so far and these will not be the last.
“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,” Theodore said.
Meanwhile, superannuation and insurance lawyers, Berrill & Watson believe reaching a conclusion on business interruption insurance policies is a long overdue imperative.
“We’re in mid-2021 and test case number two is before a single judge,” director John 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.”
Hopefully the coming cases will not only bring close but clarity to struggling hospitality businesses
26th May 2021
