IAG

An appeals court challenge by a group of small businesses seeking coverage under business interruption insurance policies for losses flowing from COVID-19 restrictions has largely failed.

Insurance Australia Group has denied it owes Greensill Bank $48.5 million under a trade credit policy issued by its agent BCC, saying the underwriter was not authorised to enter into the policy.

The insolvency administrator of Germany-based Greensill Bank AG has launched court proceedings against Insurance Australia Limited seeking US$35 million allegedly owed under a policy indemnifying the collapsed financial services firm for unrecovered debts.

The Australian Securities and Investments Commission has accused the largest general insurer in Australia of short-changing its customers a staggering $60 million in promised discounts, according to action launched in the Federal Court on Friday.

Insurers have largely succeeded in challenging COVID-19 business interruption losses claimed by a group of small businesses, in an important second test case that could save the industry billions of dollars.

While a first test case in NSW rejected insurers' interpretation of infectious disease exclusions in COVID-19 business interruption policies, potentially putting the industry on the hook for billions of dollars in claims, QBE says the law is on its side in Victoria.

Lockdown orders by the Victorian government and an international travel ban in place last year during the first wave of COVID-19 did not trigger a business interruption clause in an IAG policy at the centre of a test case brought by insurers, a judge heard Monday.

Insurance Australia has been hit with a class action by business owners whose claims for business interruption losses caused by the COVID-19 pandemic have been denied.

A $138 million class action settlement with IAG over alleged junk insurance will go ahead after a judge found he was "bereft" of power to vary his prior approval judgment and include late opt out bids by group members that threatened to derail the agreement last month.

The Australian unit of Greensill Capital is heading for liquidation owing creditors in excess of $1.75 billion, administrators revealed Friday.