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Juice bar theft falls outside policy's 'forcible and violent' coverage terms

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A juice bar owner who disagreed with QBE’s decision to reject her claim for theft on the basis the crime did not meet the terms of coverage as stated in her business insurance policy has lost her dispute before the Australian Financial Complaints Authority (AFCA).

The policy covers theft under circumstances including "actual forcible and violent" entry to or exit from the building or premises.

AFCA says the evidence gathered by police does not establish the burglar made a “forcible and violent” entry into the premises.

There was no evidence of damage on the premises and while the business owner suggests the burglar may have used a knife to prise the coded lock box open to steal the key for entry, the box has been disposed of and was not available for inspection.

AFCA notes also that she was reported to have told the insurer there was minimal damage to the box.

“The policy requires that the entry be both forcible and violent,” AFCA says in its ruling of the dispute. “I am not satisfied the available evidence in this case establishes, on balance, that the degree of force used in accessing the lock box and then removing and using the key was more than that which would normally be used in taking those actions.

“In other words, I am not persuaded the entry was ‘violent’, even if it might arguably be regarded as being ’forcible’.”

The business owner, who lodged her claim in January last year, advised QBE the following month that an individual had written a letter to her saying he was going to break into the property.

She submitted the person behind the letter broke into the premises and also stalked one of her employees, meaning her claim was valid since the policy also covers for “theft consequent upon threat or immediate violence or violence or violent intimidation”.

However the evidence indicates the police concluded the person who wrote the letter was not connected to the unlawful entry into the premises and the theft, AFCA said. Police have arrested and charged an individual over the break-in.

AFCA also rejected the business owner’s argument that QBE should accept her claim since another insurer has indemnified a claim for theft loss she submitted for her yoga studio. She operates the yoga studio and the juice bar from the same premises but took out business insurance with different insurers.

The financial dispute ombudsman disagreed, saying different policies provide different cover with different terms and conditions.

“Just because the other insurer paid a claim arising from the same set of circumstances, does not mean the insurer in this complaint is also required to pay a claim,” AFCA said. “The terms of the other policy are not relevant to this complaint.”

Click here for the ruling.