The restaurant's sole director contended the omission was unintentional and emphasised his efforts toward rehabilitation. He proposed to pay any additional premiums necessitated by his past, seeking a fair resolution to his claim. However, QBE maintained that knowledge of his convictions would have impacted their decision to provide coverage from the outset.
AFCA examined the claim documentation, highlighting that QBE had not substantiated its stance. It noted the absence of conclusive evidence of what specific inquiries were made during the policy's initiation, given the broker used an electronic interface linked to QBE's systems. Critically, QBE failed to furnish definitive proof of the questions asked, nor did it provide screenshots of the policy initiation process.
The crux of AFCA's decision rested on the ambiguity of the questions. One inquiry appeared specific to the company's criminal history, rather than its director. Though QBE suggested a duty for directors to disclose past convictions, AFCA's ombudsman determined the insurer did not demonstrate an adequate breach of disclosure obligations by the insured company.
As a result, AFCA concluded that QBE could not justifiably void the policy or deny the claim. The insurer is mandated to reinstate coverage and conduct any additional evaluations required to settle the claim under the policy's terms, all within 28 days of the complainant's acknowledgment of this determination.
This decision underscores the complexities surrounding disclosure obligations in insurance contracts and the critical need for insurers to clearly document and validate their inquiries during the underwriting process.
