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Making a Business Interruption Claim related to COVID-19

Background and Information on the Test Cases

For an update on proceedings of the appeals in the second Business Interruption test case please read the latest ICA Media Release.

For detailed information on both test cases, we refer you to the ICA website and their FAQ’s.

What this means for businesses that need to make a claim?

If businesses consider that they have suffered a Business Interruption loss they will still be able to lodge their claim, even while these issues are being considered by the courts. However, Hollard will necessarily need to await final determinations on these legal issues prior to being able to finalise these claims.

You will need to lodge your claim through BizCover (the administrator of RelyOn Insurance) by downloading the claim form and sending your completed form to [email protected]

Support and Resources available

CLICK HERE to download our Business Interruption Financial Calculation Guide
This will help explain the financial calculations and requirements to assess a Business Interruption claim resulting from the impact of COVID-19.

CLICK HERE to download a Business Interruption Required Documents List
A reference list to help identify the documents we need you to gather as evidence of the Business Interruption loss being claimed.

CLICK HERE to download the Business Interruption Claim Form
Download the Business Interruption Claim Form. Once complete, please email it to [email protected]

Frequently Asked Questions

What is the Quarantine Act Test Case (the first test case)?
The industry’s first test case is in relation to the operation of infectious disease exclusions prevalent in the Business Interruption section in Business Package insurance policies within Australia. The test case was co-ordinated by the Insurance Council of Australia (ICA) and the Australian Financial Complaints Authority (AFCA) on behalf of all insurers that sell products with Business Interruption cover and insureds who have purchased the cover. The test case required some real-life current claims cases that would help to inform the outcome and assessment of policies and claims for all providers of Business Interruption Insurance. Two insurers and their policyholders volunteered to be those cases. Hollard was one of them.

What is Hollard’s role in the first test case?
Hollard volunteered to be part of the industry test case prepared by the ICA. Whilst they remain of the clear view that Business Interruption coverages do not cover pandemics, they believe the process of legal review is valuable to their customers and themselves. By choosing to associate as a party in the industry test case, Hollard considered that it could play a valuable role to assist the whole insurance industry, in reaching a better understanding of how local infectious disease exclusions respond to the unique circumstances of this pandemic.

What was the outcome of the test case?
In November 2020 the NSW Court of Appeal found against the arguments of insurers and declared that COVID-19 is not a quarantinable disease as defined in the Quarantine Act 1908, and so the exclusion in the Disease Cover of policies is not enlivened. An application to appeal that decision has now been rejected by the High Court and so the NSW Court of Appeal ruling on that issue stands.

Why is there a second test case?
It is important to note that claims will still turn on individual circumstances and business interruption cover under many of the policies in the market will still need other triggers to be satisfied. A number of these triggers and the legal principles underpinning them have therefore been examined by the Federal Court as part of the second industry test which was heard in September 2021. The second test case considered a number of issues including:
• the meaning of policy wording triggers in relation to a disease such as the definition of an ‘outbreak’ of a disease ‘occurring’ within a particular geographical radius of the relevant location,
• what amounts to ‘preventing or restricting access to’ the premises
• relevant causation principles that apply in relation to such clauses; and
• other important elements in quantifying whether business interruption loss such as the scope of any trends and adjustments to be applied.

The detailed reasons of judgment of the Federal Court were delivered on 8 October 2021 and the parties to the second test case are now considering whether bases for appeal arise. Anticipating the likely need for appeal, the Federal Court has already set time in November to hear any appeal before the Full Bench with the appeal judgment of the Full Court expected to be delivered in December 2021. Further information on the second test case can be found on the ICA website.

Does Hollard have any of the issues being examined in the second test case in its wordings?
Although Hollard is not a named party to the second test case, the issues being considered in the second test cover a number of issues that also arise in the Hollard policies. In the circumstances, while these issues are being considered by the courts, they will necessarily need to await final determinations on these matters prior to being able to finalise your claim.

What information do Hollard need if you wish to submit a claim?
If you want to submit a claim, please download theBusiness Interruption Required Documents List . This list outlines the documents we need you to gather as evidence of the Business Interruption loss being claimed.

How is a financial loss calculated?
Each claim is reviewed based on its individual circumstances. The Business Interruption Financial Guide . offers guidance on how Business Interruption claims are generally calculated and what Hollard will take into consideration when calculating Business Interruption claims.

Can I reopen a previously denied Hollard claim due to COVID-19?
This is always an option available to insureds, however it is important to note that, for the reasons mentioned above, the current legal process in the second industry test case needs to run its course in order that legal clarity has been provided on a number of key issues. If you have already lodged a claim, you should by now have received a letter from Hollard outlining the position and what next steps may need to be taken to assist Hollard in assessing the claim at the relevant time.

Will policyholders’ future premiums be impacted by submitting a Business Interruption
COVID-19 claim?

No, for Hollard policyholders we can confirm that future premiums will not be impacted by Business Interruption COVID-19 claims being lodged, denied, or paid.

Can I still approach AFCA to resolve a complaint if I am dissatisfied?
Yes, your rights to lodge a complaint with AFCA are not affected. Hollard encourage you to look at AFCA’s website which includes all necessary information about the complaints process.
AFCA has also published information for small businesses about the BI test cases here .

Does Hollard’s support for vulnerable customers apply to COVID-19 related claims?
Throughout the pandemic Hollard have provided a range of relief to our customers and partners. Click here to visit their website for more details.

In addition, their website includes further information regarding support for vulnerable customers and financial hardship. Customers are encouraged to inform our claims department in the event of a vulnerability.

I have read that the insurance industry would suffer significant losses - will Hollard still be able to pay claims?
All insurers are regulated by APRA. As part of APRA’s prudential requirements insurers are required to keep sufficient reserves to enable payment of claims. Hollard’s regulatory capital adequacy multiple at 31 December 2020 was 1.66 times the regulatory minimum requirement. This measure reflects the level of capital a general insurer holds relative to the regulatory minimum and their multiple indicates there is a capital buffer against the risk of unexpected or adverse outcomes. Hollard remains confident in its claims paying ability.

Company information

RelyOn Insurance

Level 2, 338 Pitt Street
Sydney, NSW 2000

Contact details

E-mail address:
[email protected]

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