Suncorp provides update on COVID-19 business interruption suit against AAI unit

Suncorp Group Ltd. said a case related to COVID-19 business interruption insurance litigation against its AAI Ltd. unit has been resolved.

Rockment Pty. Ltd. initiated legal proceedings against AAI, which trades as Vero Insurance, after the insurer rejected its claim to business interruption losses resulting from COVID-19 lockdown measures in Victoria.

The Federal Court of Australia ruled on a pandemic exclusion clause contained in one of the business interruption policies under the Vero Insurance brand in December 2020, with the court accepting Suncorp's argument that the biosecurity act exclusion applied broadly for losses related to COVID-19.

AAI will contribute toward the plaintiff's legal costs given the industrywide significance of the issue, though there was no indemnity payment, according to Suncorp.