The business was poised to provide bar services for the event scheduled for February 18 last year but was halted when authorities closed the park due to the health risk. The business argued that its BI policy should cover the losses through an additional benefit clause extending damage cover to customers and suppliers or via a prevention of access provision.
However, Suncorp, the insurer, declined the claim. The insurer highlighted that the policy contained an exclusion for contamination, which the claimant sought to contest by arguing that the contamination was the result of malicious actions. Despite this, Suncorp stated the claimant did not establish that the alleged damage happened during the policy period or “at the premises” of a customer or supplier.
The insurer further clarified that access to the claimant's premises was not directly prevented or hindered, and the park's closure was a precautionary measure due to community health concerns. Consequently, the prevention of access clause was not applicable in this scenario.
The Australian Financial Complaints Authority (AFCA) reviewed the dispute and recognised that asbestos in the mulch may constitute damage. Nonetheless, they pointed out that the contamination could have occurred prior to the insurance period. The claimant failed to produce detailed evidence regarding the connections between their business, the park, and the event organisers. AFCA could not ascertain if the contamination affected premises related to the claimant's business dealings.
AFCA found no malicious intent behind the contamination, noting the NSW Environment Protection Authority conducted investigations, yet did not attribute the incident to deliberate actions. Without concrete evidence of malice, the policy’s contamination exclusion applied.
Ultimately, AFCA decided the prevention of access cover was not triggered since the claimant’s access to their own premises was unaffected directly by the park’s closure. Although the park's shutdown did occur within a stipulated 50km radius of the insured premises, the insurer relied on policy terms to deny the claim. This decision underscores the complexities businesses face in navigating coverage for unforeseen interruptions.
