The Australian Financial Complaints Authority (AFCA) has upheld a decision by Suncorp to deny a customer’s claim for potential legal liability after a fatal aircraft accident, ruling the home and contents policy he held with the insurer excludes cover for business activities.

The man, who operates a flight school from his home that is located within an aerodrome and is employed by the local council as aerodrome manger, had submitted the claim following a microlight accident in March 2016 that led to the deaths of the pilot and a passenger.

Relatives of the passenger, who was a cameraman with a television program, subsequently issued proceedings against the man for his alleged liability arising from the accident, prompting him to seek cover under his Suncorp home and contents policy.

“The policy excludes liability arising from a business activity,” AFCA says in its determination of the dispute.

The man insisted his claim for any legal liability arising from the accident should be accepted because it happened while he was assisting in filming the television program by taking contestants for microlight flights on a voluntary basis, with no formal offer or contract in place.

He had agreed to a request from the television program producers for another pilot to take the cameraman on the ill-fated flight.

The man says given the absence of a contract or formal agreement, the policy exclusions that Suncorp used as justifications to decline his claim should not apply.

He also says the claim is not for his business, so whether his flight school is listed in the policy for cover is irrelevant.

Suncorp, in rejecting his claim, says the man is not entitled to seek cover since his business is not named in the policy. The insurer also says the policy excludes liability in relation to business activities and liability that arises due to an agreement.

AFCA says while the man was acting voluntarily, he was doing so in his role of aerodrome manager for which he is employed and paid.

“Further, the panel considers the available evidence establishes the legal liability of the complainant arises from the agreement the complainant entered to host and manage the event at the aerodrome,” AFCA said. “The insurer is entitled to decline the claim on this basis.”

Policy exclusions reproduced in the AFCA ruling state Suncorp does not cover legal liability caused by or arising from business activity. The insurer defines business activity as one that is specifically undertaken for the purpose of earning an income or is registered as a business where the owner is by law required to register for GST purposes.

Suncorp says when the accident occurred, the man was operating in his capacity as a pilot and manager of the aerodrome by arranging and authorising the event. It therefore considers the event as an activity that is registered as a business and the man is obliged by law to register for GST purposes.

The insurer also says despite not receiving any monetary payment, the man was acting on his business premises and agreed to volunteer to help the television program to strengthen his working relationship with a contact who arranged for him to work with the program producers.

The contact had previously brought groups of tourists from Vietnam to the man’s flight school.

AFCA says the fact the complainant was not paid to run the event is immaterial.

“The complainant provided the necessary approvals and authorities to permit the event to be undertaken at the aerodrome for which he was the paid manager,” AFCA said.

“Taking all matters into account, the panel considers this falls within the exclusion for liability arising from business activity as aerodrome management is an activity undertaken by the complainant for the purposes of earning an income.”

Click here for the ruling.