Ausure has won a dispute after its authorised representative gave a client the wrong product disclosure statement. 

The broker breached its duty of care but was not liable for the client’s five-month business interruption loss in 2020, according to an Australian Financial Complaints Authority ruling.

The business client “has not shown the failure by the broker to provide a copy of [the right PDS] prior to renewal has caused it to suffer a loss”, AFCA says.

An insurer had offered renewal terms based on the statement PDS18, but the cover that was accepted by the client was based on PDS15, featuring wording under which the business said it could have successfully claimed.

In August 2020, the policyholder lodged a business interruption claim following 159 days of covid lockdowns. The insurer denied the claim, relying on a conformity clause in PDS18 to substitute the Biosecurity Act for the repealed Quarantine Act.

The business owner said only PDS15 was provided to it by Ausure, not PDS 18. The terms of the two were identical apart from the conformity clause.  

The claimant said that by not providing PDS18 and advising on the implications of the change, the broker limited its opportunities to explore other policies that would have provided lockdown cover.

But AFCA says there is no evidence “this or any other insurer” would have offered the client cover on the terms provided by PDS15, so it does not accept the error “materially altered its position to take up a policy that would have responded to its claim.

“There is no evidence that there was a policy on the market at that time that would have covered the complainant ... Had the complainant been provided with a copy of PDS18 at renewal, the panel is not satisfied that the changes from PDS15 would have prompted either the broker to offer advice to change policies, or prompted the complainant to change its policy.”

See the ruling here.