In the midst of the COVID-19 pandemic, casinos around the world were forced to close their doors. When many of them closed their year's books at the end of June 2020, most were forced to report disappointing or devastating fourth-quarter numbers. Australian The Star Entertainment Group was no exception, reporting an overall full-year loss of more than $85 million.
The Star filed a claim with their insurer, Chubb Insurance. The insurance policy that The Star had, guarded against "risks of business interruption." The Star said it lost its ability to conduct normal business at its properties due to COVID-19 related government mandates. Chubb denied the claim, stating that it was "untenable" and "not covered under the policy."
In June 2020, The Star Entertainment filed an application in the Federal Court in Sydney to challenge Chubb's denial of the claim. The Australian Federal Court recently decided to reject The Star's attempt to seek a business interruption insurance payout from Chubb.
Recently, The Star Entertainment Group has appealed the Federal Court's decision to reject the case. Individuals in the insurance business worldwide will likely be watching this case for further developments.
Editor's Note: Some countries, like Canada, are deciding more in favor of policyholders, while other countries, including the United States and Australia, have tended to side in favor of insurers in cases of business interruption. All of these cases come down to the specific policy language and exclusions included in the policy, but many of these types of policies contain similar language.