Hollard has lost a dispute over a roof damage claim after it was found the online insurance application process didn’t make clear the presence of asbestos needed to be disclosed.

The applicant selected iron when a drop-down list offered the ability to only choose one option, as their building report showed that was the main material used in the roofing.

The insurer says “other” should have been selected given there was more than one material, and the form also allowed for further information in a “description” field.

The Australian Financial Complaints Authority (AFCA) says it is more likely a person would choose “other” if the main type of roofing was not included in the drop-down list, and would then use the description box to name the material.

“In addition, and of significance, I do not accept a reasonable person in the complainant’s circumstances could have been aware that any asbestos in the roof was a matter relevant to the insurer’s assessment of the risk,” AFCA’s adjudicator says.

AFCA says there is no simple question such as “does the roof have any asbestos?” to make clear that any presence should be disclosed.

“As the insurer says it will not insure any property with asbestos in the roof, a simple question to this effect should have been asked,” it says. “This would remove any doubt to a reasonable person about its importance to the insurer’s assessment of the risk. “

A building inspection report held by the insured refers to asbestos in an area over the office with the rest of the building constructed using steel framing with corrugated iron.

A loss adjuster report identifies less than half the roof comprises asbestos.

The ruling, which also found no fault on the part of the broker, requires Hollard to cover the claim, with payment to include interest if it is cash settled.

The decision is available here.