A recent decision in an Australian Financial Complaints Authority (AFCA) case has ruled in favour of a business seeking coverage for damage to machinery, despite the hiring company not adhering to all prescribed safety guidelines.
The matter involved a Winlet 575 Glass Robot that sustained damage when its stabiliser failed during operation.
The incident occurred in June 2017 when the glass handling machine tipped over while reversing. A representative from the involved business suggested that the machine's anti-crush functionality might have inadvertently been activated, causing it to lurch and topple under the load of a substantial glass sheet that measured 9.5 metres in height. Speed was also cited as a potential factor.
QBE, the insurer, initially rejected the claim based on assessments from the machine supplier's managing director and their own loss adjuster. These experts contended that the mishap was likely due to the glass panel being lifted off-centre and the boom being set too high during operation.
In contrast, the business's own glass specialist attributed the incident to operator error. Their argument highlighted the challenges in precisely aligning the lifting point with the panel's centre of gravity, particularly as it shifts when the machine rotates.
AFCA's ruling pointed out that, while the glass should normally be lifted at its centre of gravity, as per the machine's manual, the actual situation involved more complex dynamics. The authority found no definitive evidence that not adhering fully to these instructions directly led to the incident, and thus deemed the insurer's exclusion inapplicable. Furthermore, AFCA cast doubt on the supplier's MD's technical conclusions and his potential conflict of interest.
Ultimately, the decision underscores the importance of nuanced technical assessments in insurance disputes and calls for insurers to thoroughly investigate all claims aspects.
Looking forward, this ruling could influence future disputes where operational mishaps intersect with technical manual prescriptions, potentially prompting insurers to revisit their evaluation protocols and company guidance concerning machinery operation claims.
Published:Wednesday, 6th Aug 2025 Source: Paige Estritori
Life insurers in Australia have joined forces with mental health advocates to press the federal government to honour its $1 billion pledge for mental health initiatives. The Council of Australian Life Insurers (CALI) is among the key signatories of an open letter organized by Australians for Mental Health, urging swift action on funding allocation. - read more
The Insurance Council of Australia (ICA) has expressed strong support for a Victorian initiative proposing a resilient homes scheme, akin to those currently operating in New South Wales and Queensland. This recommendation emerged from a comprehensive inquiry into climate resilience conducted by Victoria's Legislative Council Environment and Planning Committee, which presented 93 findings alongside 82 recommendations this week. - read more
A recent ruling mandates an insurance broker to pay nearly $300,000 in compensation to a client after an insurer, QBE, declined a fire claim and cancelled the policy due to nondisclosures. The fire, which occurred in October 2022, severely damaged the commercial premises. QBE asserted that they would have denied coverage had they known about asbestos on the property, among other unreported issues. - read more
Workers' compensation insurance is a form of insurance that provides financial protection for businesses and their employees in the event of workplace injuries or illnesses. It ensures that workers receive the necessary medical treatment and compensation for lost wages if they are hurt on the job. - read more
Comprehensive insurance is a type of coverage that protects your trade business from various risks and unforeseen events. It typically includes an array of policies that cover different aspects of your business operations. - read more
Running a small trade business in Australia involves various risks, from accidental property damage to unexpected injuries on the job. These unforeseen events can lead to significant financial losses, which might be challenging for smaller enterprises to absorb. That's where comprehensive insurance comes into play. - read more
Dictionary
Reinsurance
noun
Insurance that an insurance company purchases from another insurance company to mitigate risk.
