Was there a recent ruling or precedent set that will have a national impact on this specific practice area?
complexities and variations, clear direction and guidance via the cour ts is required for decisions to be made in a fair and consistent way. A second test case will determine a range of policy wording matters, including policy descriptions around the proximity of a COVID outbreak, how diseases are defined and regulatory requirements. While the industry grapples with the consequences of this decision, the Insurance Council of Australia warns claims may not be finalised until the conclusion of the second test case, which is scheduled to be heard in September 2021.
The Australian insurance industry, like the global industry, is facing unprecedented challenges—some of the most difficult it has experienced in recent times. Ef fective and ef ficient risk mitigation is paramount as insurers battle increasing pressure from a number of fronts across all sectors. At the same time, in navigating through these issues, insurers have been presented with oppor tunities to identify new ways to service the needs of their customers. Featuring throughout this disruptive new order are a number of key recent decisions, rulings and regulatory responses that continue to impact the risk landscape: The insurance market in Australia has traditionally • increasing cybersecurity and privacy exposures as insurers explore digital customer experience been a relatively attractive market for insurers – the one problem being pricing. In recent years the solutions • increasing frequency of major weather events market has hardened considerably due to a number • the continued prevalence of class actions in a of factors and developments that have impacted jurisdiction already well known for being “class Gilchrist Connell’s clients and the market at large. These include: action-friendly” • uncertainties surrounding COVID -19; • implementation of new compliance requirements • increasing financial pressures resulting from: and regulations following the financial services ○ low interest rates Royal Commission ○ increased claims costs arising from a raft • introduction of mandator y insurance of recent major and costly natural disasters re quire me nts for design and c ons tr uc tion and the associated rise in reinsurance practitioners costs • addressing key liability, damages and limitations ○ industry-wide decline in customer retention relating to abuse and sensitive claims matters, as Australian households continue to and battle social and economic impacts of the • prioritising the protection of the public COVID-19 global pandemic, in assessing mat ters global recession and a involving misconduct by sluggish post-GFC recovery health professionals. while facing increased Front and centre currently insurance costs is the uncertainty surrounding • harsher regulations and an business interruption cover for “THE RISKS ASSOCIATED WITH increase in securities class those impacted by COVID -19, actions as a result of the Hayne following the test case defeat in REMOTE WORKING HAVE CREATED Royal Commission the High Court in June this year. NEW OPPORTUNITIES FOR CYBER• i m p lic a ti o ns of o p e r a ti n g This judgment upheld the initial remote workplaces, including 20 20 NS W C our t of A ppeal ATTACKERS, INCLUDING PHISHING employment practices liability decision, finding in favour of and cybersecurity as a result AND SOCIAL ENGINEERING policyholders and denying of COVID -19 insurers’ application for special EVENTS. IN ADDITION, CLAIMS • issues such as cladding leave to appeal. The primar y and increased regulation decision was relevant to claims RELATING TO COVERAGE UNDER of the building industr y and lodged across Australia. CYBER, MEDIA, AND TECHNOLOGY associated consultants, and It is estimated that more than • increase in litigation funding 250,000 business interruption ERRORS AND OMISSIONS POLICIES of c l as s a c ti o n s , w i t h t wo policies with claims valued at actions currently in train HAVE INCREASED DUE TO THE around $10 billion are affected. involving major onshore For many businesses, these PANDEMIC.” insure rs while awaiting the p olicies have b e e n tailo re d o u tc o m e of S e p te m b e r ’s by their broker for their second COVID -19 test case. individual needs. Due to these
Have there been any major developments or changes that could impact your clientele?
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Australia