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Small businesses heavily affected by COVID-19 may now be able to make insurance claims on their business interruption policies.

Insurance Council of Australia recently lost a case in the New South Wales Supreme Court of Appeal opening up the door of hundreds of millions of dollars in payouts.

Insurance companies had originally rejected COVID-19 related claims arguing that their policies did not cover ‘quarantinable diseases’. The court found that COVID-19 was not considered a ‘quarantinable disease’ opening the insurers up to thousands of claims from businesses that have suffered losses during the lock down period.

The Insurance Council is considering an appeal in the High Court of Australia however Suncorp recently announced that it would allocate an extra $125 million to potential business interruption claims due to Victoria’s extended lockdown.