An insurer has lost a dispute over a claim for a damaged coal conveyor belt gearbox, despite evidence the equipment fell from a truck as it was driven through a roundabout because the load was not properly secured.

Zurich had rejected the claim made under a Goods in Transit (Carriers) Insurance policy on grounds the complainant had failed to take all reasonable steps to secure the load, in breach of the policy conditions.

The load shifted when the vehicle navigated the roundabout, causing the restraints to snap and the load to fall from the vehicle, resulting in considerable structural damage.

While both parties agree that the restraints used for securing the load were inadequate, the complainant insisted all reasonable steps have been taken to fasten the load safely and the accident was the result of a miscalculation and error.

An expert in restraint loads on vehicles engaged by Zurich had determined the steps taken to secure the load were not appropriate and not compliant with current requirements as set out in the Load Restraint Guide 2018 edition.

The complainant’s safety and systems manager also confirmed the restraint measures were inadequate, with the driver using three tightened straps to secure the 8-tonne load, despite the straps having only a 2.5-tonne capacity.

The driver says, having reflected on the event, he would have used a different method to secure the load.

But the Australian Financial Complaints Authority (AFCA) found in favour of the complainant, who lodged the claim in October 2020 and provided a repair invoice of $160,355.87 for the damaged gearbox.

“The complainant’s driver may well have been negligent in his assessment of the risk and the restraints required,” AFCA says in its ruling of the dispute.

“It is clear however that he was concerned as to the method to secure the load and had applied what he genuinely believed, after consultation with two colleagues, adequate restraints.”

AFCA says the test for reasonable care or precautions is “wholly subjective” and that it requires proof that the complainant knew of the potential danger and deliberately or recklessly “courted the danger” by failing to take appropriate measures to avoid it.

Based on the information provided, AFCA says the driver took reasonable steps in assessing the risk.

“The complainant driver’s actions were not reckless or deliberate, without regard to the risk and the insurer has not established a breach of condition of cover,” the AFCA ruling says.

AFCA says Zurich must either indemnify the owner of the damaged item in accordance with the terms of the policy or if the complainant has paid for the repairs, reimburse the complainant the cost of the repairs plus interest on the repair cost from the date of works was made until the claim is settled.

Click here for the ruling.