The Quarantine Act has been replaced by the Biosecurity (Consequential Amendments and Transitional Provisions) Act 2015
In the insurance industry we have to be across so much, as our industry touches virtually every part of the economy.
This week has been quite hectic and I had printed off the Quarantine Act to read in full during the weekend, as it features in several insurance policies invoking an exclusion when a disease is notifiable under this Act.
However, this afternoon a broker who asked to remain anonymous, was ahead of me and started her research and found that the Quarantine Act 1908 has been replaced by the Biosecurity (Consequential Amendments and Transitional Provisions) Act 2015.
I have never seen these words in any exclusion. So what does this mean for it?
When I draft a policy, and I need to refer to a piece of legislation, I quote the current name of the legislation or standard and then say: “or its current equivalent“. An example is the way I drafted an endorsement for Glass in the Mark IV and Mark V ISR policies.
The cost incurred in repairing or replacing the broken glass in accordance with Australian Standard AS 1288-2006 or its current equivalent,…
Emphasis mine
Taking a quick look at a handful of exclusions for infectious diseases I see that most read: Quarantine Act 1908 (as amended).
When I search the word amended in Google I get the following definition:
verb past tense: amended; past participle: amended
- make minor changes to (a text, piece of legislation, etc.) in order to make it fairer or more accurate, or to reflect changing circumstances.”the rule was amended to apply only to non-members”
- improve the texture or fertility of (soil). “amend your soil with peat moss or compost”
Here we do not appear to have an amendment that is a minor change but a repeal of the act and a whole new act.
Using the same search engine, the definition for repeal reads:
repeal/verb past tense: repealed; past participle: repealed
revoke or annul (a law or act of parliament). “the legislation was repealed five months later”
This may mean that insureds may challenge the current exclusion.
This is a case where I ask that you do not shoot the messenger. I did not write the exclusion. My understanding is driven from the reinsurance market and so I assume reinsurance programs use the same language. If they do not, and reinsurers exclusions have been updated to reflect the change in legislation from 3+ years ago, then…
This sort of thing can easily be overlooked. However, with so much legislation at state and federal level, it is more than one person can hope to cover particularly when they are doing other things as well. That is where our industry body needs to have the resources to do it for the entire industry.
Hi Allan, thank you for the information regarding the Biosecurity (Consequential Amendments and Transitional Provisions) Act 2015.
If you haven’t already done so, you may also wish search for the Biosecurity (Listed Human Diseases) Determination 2016 which, among other things, includes a list of seven [notifiable] human diseases.
Hi Allan, further to my comment dated 7 February 2020, it is my understanding that Corona Virus was added to the List of [notifiable] Human Diseases in January 2020 and, therefore, it would now be regarded as a [notifiable] human disease that is regarded as an exclusion to the “Infectious Diseases … Endorsement” applicable to the Business Interruption section of an ISR or business package policy.
Thank you once again for alerting us to the fact that the Quarantine Act has been repealed and replaced.
Hi Carl, you are perfectly correct. I do see a possible issue where an insurance policy refers to the abolished Quarantine Act and not its replacement the Biosecurity Act 2015.
Hi Allan, I have had a client specifically ask if the use of the repealed Act terminology in this clause means that the exclusion does not apply. I don’t know that I can answer them with any certainty. I think that is correct but will it come down to intention?
The term ‘…quarantinable disease under the Quarantine Act 1908 and subsequent amendments’, is quite specific and I suspect ‘subsequent amendments’ may not be broad enough to cover a complete repeal and replacement of the Act. Not the intention of insurers, but that is what the wording says. Possibly this will be addressed on a case by case basis.
It is interesting though how many insurers still have the repealed Act reference in their wordings. I expect they are changing this as we speak…
Looking at the wording for several insurers that mention the repealed Act they state “…..there is no cover for highly pathogenic
Avian Influenza or any other diseases declared to be quarantinable diseases under the Quarantine Act 1908…”
So is COVID19 a highly pathogenic Avian Influenza?
Hi Cheryl
Sorry for the delay. I have been over in Europe for the past couple of weeks and with the travel and meetings coupled with terrible internet, I have not had a chance to do much on my blog including answering comments.
I have been doing some research and speaking to a number of people and will post on the different acts tomorrow.
Allan, is there not an argument a policy should respond if sold prior to Coronavirus being listed as a disease under the Biosecurity Act (2015)?
(thanks for your contribution)
The short answer is no. The way the exclusion is worded is that as soon as the disease is notifiable, it is excluded.
It was designed this way by the original designers.
[…] You need to check the specific wording of your policy and talk with your insurance broker to see if there are any options with your policy, or any legal “wiggle room.” (e.g. some policies still refer to the Quarantine Act and not the Biosecurity Act) […]
[…] April and May mainly saw Leisure Travel and Business Packs impacted by COVID-related changes. These being Business Interruption section, particularly to Closure restrictions, and updating the Acts from Quarantine to Biosecurity in Exclusions. […]