The Australian Financial Complaints Authority (AFCA) has found in favour of Melbourne Insurance Brokers in a dispute triggered by the theft of $75,000 in stock from a business premises.

The complainant argued the broker did not provide appropriate advice or act in a timely manner in arranging cover for stock held at the premises, and as a result it was uninsured when the property was burgled on May 18 last year.

Emails were exchanged between January 22 and May 13 about quotes for covering stock at the new premises, while there were also discussions about cancelling a policy for a shop that had been closed.

AFCA says the broker was aware the complainant required cover for the new premises and the email trail shows the complainant followed up the broker on several occasions. It says “the brokers conduct in this regard failed to meet appropriate professional standards”.

But emails and records do not show the complainant specifically informed the broker of a decision to go ahead with cover offered in quotes provided.

The broker says he was instructed to hold-off establishing the new cover during a conversation on May 13, and was asked to get in touch to finalise the insurance after a sales event at the pop-up shop on May 15.

AFCA says the broker's file notes and a May 13 email support that a policy was not put in place “based on the complainant’s express instruction” while a previous policy, that wouldn’t have covered the burglary in any case, was cancelled as requested.

The adjudicator says the broker “could have done more at this stage” and could have advised the complainant to take out a cover note that would allow a 14-day cooling off.

The file didn’t include any notes to show the complainant was informed of the risks of not having the insurance, although in a statutory declaration the broker says that was discussed.

“It is clear however, that the complainant was aware that there was no cover for the stock,” the decision says.

The broker’s file note shows that the complainant advised on May 20 that the premises had been burgled two days previously and was seeking to have cover backdated.

“On the available information, and in the absence of any evidence to the contrary, I am satisfied the broker did not breach its duty in the circumstance and is therefore not responsible for the complainant’s loss,” the AFCA adjudicator says.

The case is available here.