At the inception of the policy in 2019, the premises were insured as a restaurant with wok cooking facilities. However, by 2023, the upper floor was being used for religious gatherings—a change that was not communicated to AIG. This non-disclosure was critical because, in May 2023, AIG updated its underwriting guidelines to classify religious institutions as 'outside appetite' due to increased fire risks associated with arson attacks.
The Australian Financial Complaints Authority (AFCA) reviewed the case and upheld AIG's decision to deny the claim. AFCA emphasized that the landlord's duty of disclosure is fundamental to the insurance contract. By not informing AIG of the change in tenant activities, the landlord breached this duty, justifying the insurer's refusal to cover the theft loss.
This case underscores the importance for property owners to promptly disclose any significant changes in tenant activities to their insurers. Such transparency ensures that the insurance coverage remains valid and that property owners are adequately protected against potential losses.
Published: Sunday 8th February, 2026
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