Allianz will not appeal against a Queensland Supreme Court decision concerning a flooded Brisbane business, after reaching a settlement with the claimant.

The court had ordered Allianz to pay LMT Surgical, whose premises in Milton were flooded in January 2011 when stormwater drains backed up.

Allianz lodged a notice to appeal the decision, but has now chosen not to proceed.

It had cited a flood exclusion in LMT’s policy that meant the insurer was not liable for inundation by water overflowing from a natural watercourse, lake, reservoir, canal or dam.

The court rejected the interpretation of the drainpipes as a watercourse or a canal, and ruled the flood was not caused by water overflowing from the Brisbane River.

Some insurance lawyers believe the decision will encourage other claimants to examine their policies.

But a loss adjuster told insuranceNEWS.com.au the LMT policy did not have a standard exclusion, so the ruling is specific to that case.