The Australian Financial Complaints Authority (AFCA) has found against a policyholder who argued that a broker failed in its duties by not lodging a pandemic-related claim for business interruption cover.

The complainant argued the broker refused to help it lodge a claim on two occasions, and requested the broker pay the business interruption losses because of the “refusal of service”.

The policyholder said financial losses included the payment of premium while the business was closed, with the business now shut due to financial hardship and partly because of not receiving financial support from the insurer.

AFCA’s adjudicator accepts the complainant wished to make a claim and one was not lodged, initially in October 2020, but says the broker, Scott Winton Nominees, did not say the complainant “could not claim” but rather advised her to await the outcome of court test case decisions on certain policy wordings.

AFCA says the advice was reasonable in the circumstances, and that another complaint lodged by the person against the insurer is still pending amid the test case process.

“The available information does not establish the broker breached its duty nor does it establish the complainant would have been in a better position had a claim been lodged in October 2020,” AFCA says.

“The complainant’s claim and complaint about the insurer’s decision would still be pending awaiting the outcome of the test case.”

Other issues raised included that the policy was renewed without policy changes and the status of business interruption proceedings being brought to her attention, and she paid a premium for a different policy than that previously held.

The broker says it was not notified of an updated supplementary product disclosure statement. It says correct policy wordings were provided at the time the renewal was processed. No further information on the amount of premium paid or how it would have been different was provided by the complainant.

A dispute also arose over a relief from payment request, with the complainant saying other insurers waived premiums.

The broker submitted insurers did not waive premiums, but it offered to ask to extend the time between monthly deductions. It said the only way to have funds returned would have been to cancel the policy, which was done in September 30 2021 because of an overseas relocation.

The broker says even though the business may have been closed because of lockdowns during the pandemic, insurance was still needed, for example to cover for fire or stock damage.

AFCA says based on the available information, it’s not satisfied the broker breached its duty of care to the complainant nor, if there was a breach, the breach has caused loss. A request for compensation was rejected.

“I acknowledge the difficulties faced by the complainant because of the adverse effect on her business because of the pandemic but I am not satisfied the broker’s claims management and actions warrant an award of compensation,” the adjudicator says.

See the full ruling here.