A convenience store owner who was the victim of theft when an employee stole money and contents will only have part of their losses covered after losing a business pack claims dispute.

The theft occurred on August 23 last year, when a casual employee stole a key, entered the store outside of business hours with an accomplice, and stole more than $20,000 worth of store contents and $3450 in cash.

AIG limited its liability for the claim because the policy only covered theft of contents under certain circumstances. The insurer said there was no cover as keys were used and entry was not violent and forced.

The complainant said the policy did not clearly define theft and that the insurer should cover all the stolen stock and contents costs.

The Australian Financial Complaints Authority (AFCA) ruled that AIG was entitled to limit its cover, saying that it informed the store owner of the grounds for policy exclusions, and agreed with the insurer’s assessment that the theft did not meet the policy’s criteria.

AFCA said there was no evidence to show that the thieves broke into any of the store’s cabinets, counters, or showcases during the burglary.

AIG partially covered the theft of money, but its policy limits the cover amount for stolen money to $1000 when it is not kept in a locked safe or strongroom. AFCA reaffirmed this decision was consistent with the policy.

The claimant said AIG should redefine its policy to use the term burglary, not theft, if coverage is restricted to burglary events. But AFCA says the policy is "reasonably clear" and it is at the insurer's discretion if it wishes to change it.

Click here for the full ruling.