Insurance Australia Group hit with class action

IAG this week confirmed that it is aware CMC Hospitality has filed an application starting a representative proceeding in Federal Court, but claims it has not been served with the application and is “not otherwise aware of the detailed nature of the application, except that it appears to relate to insureds who hold policies with CGU and business interruption losses related to COVID-19”.

Slater & Gordon Lawyers has confirmed to ifa that it has filed the class action “on behalf of thousands of Australian business interruption (BI) insurance policyholders against Insurance Australia Limited, one of the insurers that have knocked back claims for losses following forced COVID-related closures”.

Slater & Gordon practice group leader Mathew Chuk said the strategy by insurers to date has been to “divert, deny and delay”.

“Businesses have already waited 18 months, with no clear end in sight, for clarity on their business interruption insurance coverage,” he said.

“For many, this has been the toughest 18 months they’ve faced, and payment of these claims is sorely needed.

“The objective of this class action is to have the claims of the insured assessed and paid out as quickly as possible.”

The news comes after IAG began an industry test case in the Federal Court this week alongside a number of other Australian insurers.

“IAG intends to follow the final rulings of the courts and assess any business interruption claims as quickly as possible following the final resolution of the issues in court,” a statement reads.

“IAG remains satisfied with the adequacy of its provision for business interruption claims.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.