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Australian jewellery retailer joins COVID-19 class action lawsuit

A number of Australian small business owners denied insurance payments for losses during the COVID-19 pandemic have joined class action lawsuits against several industry giants.

Two lawsuits – one against Australian insurance company QBE and another against London-based Lloyds – are being brought by Gordon Legal’s trial attorney Andrew Grech.

Founded by renowned lawyer Peter Gordon, Gordon Legal specializes in class actions in Australia and overseas, including the United States.

The National Opal Collection (NOC) – the retail arm of Cody Opal Australia with offices in the Sydney and Melbourne CBDs – had in place a business interruption policy signed by AXA and Lloyds prior to the pandemic. It has now joined the Lloyds class action lawsuit.

As reported by Jeweller, Damien Cody, director of Cody Opal Australia, has publicly indicted insurance companies for refusing to offer compensation to small businesses with interruption policies.

The NOC’s business interruption policy included a clause preventing the event of an “outbreak of a reportable infectious or contagious human disease within a 20-mile radius of the [premises]”.

However, a lawsuit against the policy was denied in May 2020, with the insurer claiming the company’s losses – which Cody estimates at more than $ 3 million – as a result of COVID-19 cases within 20 km of around the site should have been created instead of “overriding factors resulting from the COVID-19 pandemic as a whole”.

In January Cody told Jeweler, “Policyholders expect this [insurance companies] would act empathically, ethically and professionally in responding to claims from small businesses suffering extreme losses as a result of COVID-19. “

The ABC reports that the QBE and Lloyds class action lawsuits are the first in Australia related to pandemic insurance payouts.

“We are determined to take them on. Perhaps the insurers did not expect a global pandemic. But even so, we paid big bucks and got business interruption insurance for many years and the pandemic hit it, ”Cody told ABC.

“My company and many others like mine have been hit hard. We lost 98 percent of our sales. We rely on us to generate income from online sales.

“It was terribly exhausting. We had 20 employees who we had to resign. These are people who have been with us for many years. It definitely made me believe that justice prevails, ”he added.

While Grech estimates that 25,000 policyholders are eligible to join the QBE lawsuit, it is believed that around 100 companies in Australia are covered by Lloyds’ specialty policy.

Insurers have argued that business interruption policies should cover localized outbreaks like Legionnaires’ disease, rather than pandemics, and that their exclusion clauses must remain in place, although often referring to outdated laws.

The Insurance Council of Australia estimates that failure to comply with the exclusion clauses could qualify around 250,000 policies, which could total $ 10 billion – an amount for which the industry does not have adequate reserves.

Read more:
Australian opal dealer challenges rejection of COVID-19 insurance
ABC: Small businesses are taking on insurance giants QBE and Lloyds in a COVID pandemic class action lawsuit

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