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Huge payouts possible as insurers lose test case over Covid-hit businesses

Insurance Council of Australia considering appeal after court rules that policy clauses excluding damages from quarantinable viruses were invalid

Insurers have lost a test case on coverage for businesses that closed due to coronavirus, potentially opening the door to hundreds of millions of dollars in payouts.

The NSW court of appeal on Wednesday ruled that clauses in insurance policies that worked to exclude damage from viruses declared to be quarantinable under the Quarantine Act were invalid because the law was repealed in 2015 and replaced with a new one.

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