The salon's insurance policy included an infectious disease clause covering losses from outbreaks within a 20km radius. The Australian Financial Complaints Authority (AFCA) found that the salon experienced a marked revenue drop in early March 2020, coinciding with a confirmed COVID-19 case nearby. This decline occurred prior to statewide restrictions, indicating a direct impact from the local outbreak.
AFCA's decision mandates the insurer, Lloyd's Australia, to accept the BI claim and assess related costs, including legal expenses up to $10,000. The coverage under the policy's additional benefit equates to $30,000, representing 20% of the sum insured for gross income loss.
This case highlights the importance for beauty professionals to:
- Understand the specifics of their insurance policies, particularly clauses related to infectious diseases and business interruption.
- Maintain detailed financial records to substantiate claims of revenue loss.
- Stay informed about local health developments that could affect business operations.
By being proactive and knowledgeable about their insurance coverage, beauticians can better navigate challenges posed by health crises and ensure their businesses remain protected.
