Allianz may appeal against the Queensland Supreme Court’s ruling that it must pay a disputed claim from a business inundated by the 2011 Brisbane floods.

The claim by LMT Surgical against an industrial special risks policy was rejected because of a flood exclusion.

Allianz says it has lodged a notice of appeal to keep that option open, but “further assessment of the commercial pros and cons of an appeal are still under way before a final decision about whether to file an appeal [will be] made”.

The decision in LMT’s favour was seen as having consequences for other insurers, although one loss adjuster has told insuranceNEWS.com.au the wording in the policy is not widely used.

The company was inundated by water from the Brisbane River that backed up through two storm-water drainpipes. 

The case hinged on the policy’s definition of flood: “The inundation of normally dry land by water overflowing from the normal confines of any natural watercourse or lake (whether or not altered or modified), reservoir, canal or dam.” 

Allianz argued the drainpipes should be considered a canal, according to a dictionary definition of a canal as “a pipe or tube for conveying liquids”.

But Justice David Jackson says it is clear this is not the correct interpretation. He says the pipes are not a modified or altered natural watercourse, nor part of the “normal confines” of the river. 

“In my view the insurer’s liability to indemnify the plaintiff for the damage occasioned by inundation of the premises… was not negated by the flood exclusion.”