Federal court judge Justice Jayne Jagot ruled the insurance companies should not have to pay claims made under clauses that relate to the government closing business premises due to an outbreak of disease at or nearby the premises, damage for an outbreak at the premises itself and damage due to restriction of access to premises because of a catastrophe.

Jagot said that other than in one of the test cases – a travel agency in Melbourne, where there was an outbreak of Covid – “I have concluded that these insuring clauses do not apply in the circumstances of each case.

She said in nine cases before the court the actions of health authorities in closing down businesses weren’t closely enough linked to the specific situation at their premises.

“Although the actions of the authorities applied to the premises/situation, it is not possible to conclude that the orders were made as a result of any circumstance at the premises/situation or within the specified radius,” she said.

She said applying prevention of access clauses that would have resulted in claims being valid when the other clauses were not “would involve profound incongruence and incoherence in the operation of the policy which should be avoided”.

“In some cases, the order/action of the relevant authority did not require closure of the premises/situation,” Jagot said.

The test cases follow a previous case brought in the New South Wales supreme court, which insurers lost. Friday’s result does not displace the NSW ruling which was about disease definitions in commonwealth legislation.

Appeals against the federal court cases are expected to be heard in November.

An appeal by Sydney casino operator Star City against a federal court ruling that it was not entitled to the bulk of its insurance claim for business interruption insurance is also likely to be heard in November.

Insurers were left scrambling in November 2020 after losing the NSW case.

The court ruled that clauses in insurance policies that worked to exclude damage from viruses declared to be quarantinable under the Quarantine Act were invalid because the law was repealed in 2015 and replaced with a new one, the Biosecurity Act.

Insurers failed to update the wording in their policies when the law was changed.

The Insurance Council of Australia immediately started work on mounting additional test cases covering different issues.

IAG, Australia’s largest general insurer, estimated claims confirmed as valid due to the NSW test case would cost it $865m, after tax, and raised $750m from shareholders towards the expense.

In June, the high court denied special leave to appeal against the NSW decision.