The Australian Financial Complaints Authority has ordered QBE to pay a claimant an additional $65,000 for business interruptions after finding the insurer did not adequately address issues with its appointed loss adjuster that delayed property repairs.

QBE agreed to cover the complainant’s claim for damage to their Tasmanian bed and breakfast business following a fire on September 23 2022. It accepted liability, agreed to demolish and reinstate the property, and paid the insured $130,000 for a year’s business interruptions. 

However, following acceptance of the claim, significant delays hampered the rebuild. 

QBE appointed a loss adjusting company, referred to as CG, to manage the repairs, and the loss adjuster arranged for its agent, known as BH, to handle the matter. 

BH delivered two reports on the progress of the rebuild between October and December 2022, but delays began to occur after he left CG shortly after. 

CG did not deliver another report until late March last year, when it detailed demolition plans. It provided a second report that May, highlighting the need for additional demolitions. 

The complaints authority notes that despite receiving approval from Tasmanian Heritage, at this point CG was still reviewing an expert’s quote for the demolition. 

QBE was notified about the delays and hired a different loss adjuster to manage the work. The new loss adjuster was BH’s new employer, and he was appointed to lead the project. 

The parties agree work has begun since the change but do not expect the rebuild to be completed until late this year.   

The complainant said QBE’s claim handling contributed to the delays, noting “no meaningful work” began on the property until June last year. 

The complaints authority acknowledges the repairs have “significant complexities” such as heritage requirements and asbestos concerns.    

But it says “significant and unexplained delays” occurred due to the management of CG and its agents, especially after BH departed. The delays were “not directly the insurer’s fault”, but it was responsible for the conduct of its appointed agents. 

The authority says it is fair for QBE to pay additional costs due to its failure to monitor the claim.

“The insurer should have kept a closer eye on what was happening and, although a complex claim given significance of loss, should have insisted on explanation for delays,” the authority said. 

“While it is not responsible for people leaving the employment of its agents or becoming ill, it is responsible to ensure the work progresses. It cannot ignore this or blame its agents for failing to properly supervise the progress of the claim.”   

QBE was also ordered to pay the complainant $3000 for non-financial losses because the delays caused frustration and stress. 

Click here for the ruling.