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Statement regarding the article published in InsuranceNEWS.com.au on 10 July – July 2020

An article appeared in InsuranceNews.com.au on 10 July entitled “’Insurance businesses will collapse’ under virus pressure” off the back of a report issued by Global Insurance Law Connect, with Australian commentary provided by Sparke Helmore.

The somewhat alarmist nature of the headline caused some intense debate in the insurance industry and we therefore wanted to provide some clarification and give greater context to the commentary.

The report was written in late March when COVID-19 was hitting the world and Australia in earnest.  At that point in time, predictions around potential impacts on many industries including the insurance sector, were concerning.  The observations included in the report were based on those predictions and informed by anecdotal feedback from, as well as conversations with, a number of leading industry participants.

It is true to say that as we stand today, the severity of those predicted impacts has not yet come to pass in this country. The insurance industry has been resilient and focused on compassionate support to those customers in the community experiencing financial hardship. 

We do believe however that impacts could still play out in the travel, life, health, event cancellation and business interruption classes. The coverage issues arising in the latter are complex, and we have already seen litigated coverage disputes in several jurisdictions, particularly the US and parts of Europe.

In fact, business interruption claims are on the rise and in reasonable numbers and coverage disputes in Australia are inevitable – and it is fair to say that we don’t yet know the full extent or the impact of those claims.  What we do know is that insurers have made their position clear; wordings reflect the intention that losses associated with COVID-19 are not covered.  Given there are two very distinct sides to the argument, it is also inevitable that litigation could be the outcome more often than not and the small niche players – the particular subject of our comment on potential business failures – could be the hardest hit.

By way of further clarification, we have been advising clients on a number of COVID-19 related coverage issues under a variety of policies, including claims under contingent business interruption extensions. To date we have not seen a claim capable of triggering any cover available under those policies including under extensions which do not require actual physical damage at the Insured Premises. 

The comments in the penultimate and final paragraphs of the article were made in the context of a discussion about how insureds might seek to argue that certain COVID-19 losses might fall for cover.  It was not intended to be a statement of Sparke Helmore’s view on the availability of cover for losses under contingent BI extensions generally or in any specific case that we have dealt with.  Rather, it was merely an observation about the “out of the box” way in which claims might be framed and that insurers will need to be poised to address them.

We apologise for the offence we have caused our clients and those in the industry. We pride ourselves on always being a huge supporter of the industry, standing side by side over the last 100+ years, and know that those words around business failures should not have been used.

Approaches to coronavirus report – July 2020

Global Insurance Law Connect this week launches its new report, “Approaches to coronavirus”. The report brings together the latest views on COVID-19 from Global Insurance Law Connect member firms in sixteen countries around the globe.

The report examines some of the common themes of coverage as well as legal and regulatory issues observed by the member firms. It also looks at the potential claims emerging and how the depth and breadth of those claims could impact a local insurance industry.

GILC member firm Sparke Helmore provided the commentary for Australia and noted that we are seeing COVID-19 have impacts in the travel, life, health, event cancellation and business interruption classes, where limits of coverage are being pushed in respect of losses associated with the pandemic. But we are also seeing impacts across liability, defence costs, financial lines and D&O classes. We think the majority of claims will be long tail claims, both in this pandemic phase but also when the recovery begins.

The Report covers Australia, Belgium, Brazil, China, England & Wales, Finland, France, Germany, India, Italy, Luxembourg, Mexico, Norway, Spain and Switzerland.

Click here to visit the Global Insurance Law Connect website. Click here to download the full report.

Risk Radar – April 2020

Global Insurance Law Connect (GILC) today launched its second annual Risk Radar report. The report pulls together the key themes from across the GILC network and gives a snapshot of the major issues that are currently bubbling up in each major insurance destination where the GILC has a presence—19 countries.

GILC member firm Sparke Helmore provided the commentary for Australia and noted that a number of issues stand out as having a significant impact on the local insurance industry and the way it operates.  The top three issues that stand-out in the Australia as creating significant headwinds for the local industry are:

  • climate risk
  • technology, and
  • war for talent.

Shortly after our members drafted this year’s report, the world was shocked by the advent of the COVID-19 pandemic and we are already seeing COVID-19 have a significant impact across multiple lines of cover.  GILC will be publishing a separate guide dealing with specific coronavirus legal issues and I will share that with you in the near future.

The Risk Radar covers Australia, Belgium, Brazil, China, England & Wales, Finland, France, Germany, India, Ireland, Italy, Luxembourg, Mexico, Norway, Scotland, Spain, Switzerland, Taiwan and United States.

Click here to visit the Global Insurance Law Connect website. Click here to download the full report.

Annual Review 2019 - January 2020

Global Insurance Law Connect (GILC) this week launched its Annual Review for 2019. The compilation provides a consolidated look back at the most noteworthy articles on global insurance from major markets including Australia, Brazil, France, India, Italy, Norway, Switzerland, Taiwan, and United Kingdom—providing insight to the key issues faced by the ever-evolving industry throughout 2019.

Click here to download the full report.

Click here to visit the Global Insurance Law Connect website.

Spotlight on Emerging Markets - October 2019

As growth within the mature insurance markets stagnates, so carriers and brokers are looking for opportunities for growth in the emerging economies. When you consider that these countries include global economic giants China and India, you can see how important the “emerging” players are for insurers.

These markets are growing rapidly, which makes them exciting places to work and invest, but sometimes also higher risk. Each emerging market has its own complexities, its own legal structures, and often a distinct approach by its own government, which must be understood when considering growth prospects and possibilities for entering the market.

One of the strengths of Global insurance Law Connect is the wide membership among specialist firms in emerging (as well as established) insurance markets. As these firms have unique and well-recognised expertise in insurance law in their own markets, it was concluded that clients would find a spotlight on the local nuances of emerging market helpful—a “what’s happening now” guide for insurers who have an interest in this area.

In addition, the comparison of different markets allows readers to understand common and particular themes, and to see how different countries have tackled different growth, regulatory and economic issues. 

Click here to download the full report, which is accompanied by a seminar video series presented by GILC on each of the Emerging Markets, available here.

Click here to visit the Global Insurance Law Connect website.

Risk Radar - July 2019

Global Insurance Law Connect (GILC) this week launched its first annual Risk Radar report. The report pulls together the key themes from across the GILC network and gives a snapshot of the major issues that are currently bubbling up in each major insurance destination where the GILC has a presence—15 countries listed below. Click here to download the full report.

About GILC

Sparke Helmore Lawyers is proud to be a member of GILC and the sole Australian representative firm.

GILC is a formal network of leading insurance law experts with its formation inspired by client demand. The network is comprised of like-minded and high-performing independent firms from across the globe that specialise in insurance law. 

Chris Wood, Partner in Sparke Helmore's Commercial Insurance team, commented “We are delighted to be joining GILC. It makes a powerful statement about the firm’s deep commitment to the insurance sector as well as reinforcing our position as one of the market leading insurance law practices in Australia. This move gives Sparke Helmore the ability to connect clients across the globe, delivering smart solutions through the lens of leading thinking and a dedication to innovation.”

Countries represented in the network are:

  • Belgium
  • Brazil
  • China
  • France
  • India
  • Ireland
  • Italy
  • Mexico
  • Norway
  • Spain
  • Switzerland
  • Taiwan
  • United Kingdom
  • USA

What makes GILC a stand-out is its special legal and risk interest groups. We see this collective contribution of local expertise from each of the member firms as a powerful proposition. There are currently 14 special interest groups including:

  • Construction
  • Complex bodily injury claims and health, safety & regulatory
  • Cyber/TMT
  • D&O
  • Energy
  • Environment
  • Financial lines
  • Marine
  • Fraud
  • Policy development
  • Product liability & recall
  • Property
  • Reinsurance

GILC has also recently committed to four priority specialist groups being Cyber, D&O, financial lines and product liability and recall. These areas align strongly with Sparke Helmore’s national Commercial Insurance team’s priorities and we will actively engage with GILC global thinking for these groups.

Gillian Davidson will take a seat on the board of GILC as Asia Pacific representative. “It’s an honour to be the appointed to the board of GILC and fast-track the firm’s connectivity to the other member firms. We have a great deal of knowledge and expertise to contribute given the burning platforms being experienced across the insurance market. I will be championing a number of issues as a member of the Board including strategic and gender diversity,” said Gillian.

Click here to visit the Global Insurance Law Connect website.

Media enquiries
Gillian Davidson
Gillian Davidson
Partner
t: +61 2 9373 3535+61 2 9373 3535
m: +61 404 828 264+61 404 828 264
o: Sydney
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Catherine Power
Catherine Power
Partner
t: +61 2 6263 6373+61 2 6263 6373
m: +61 427 330 193+61 427 330 193
o: Canberra
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