The restaurant, insured by QBE, suffered extensive damage from an arson attack on August 2, 2024, leading to significant operational disruptions. QBE denied the claim, citing the director's undisclosed criminal convictions as a breach of disclosure obligations. The director contended that the omission was unintentional and offered to pay any additional premiums resulting from his criminal history in exchange for claim approval.
AFCA examined the case and found that QBE could not provide evidence of the specific questions asked during the policy's inception. The insurer's reliance on an electronic platform managed by a broker meant that the exact disclosure process was unclear. Without concrete proof that the director was directly questioned about his criminal history, AFCA determined that the insurer had not established a failure in the duty of disclosure.
Consequently, AFCA ordered QBE to reinstate the policy and process the claim in accordance with its terms and conditions. This ruling underscores the necessity for insurers to maintain clear and documented communication during the underwriting process. It also serves as a reminder to business owners of the critical importance of full disclosure when obtaining insurance coverage to avoid potential disputes and ensure comprehensive protection.
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