Heat Claims Denied: Insurer Cites 'Oven Effect' in Container Dispute

5

Earlier this year, the business owner observed deformation and melting of the pool covers, which transpired shortly after the containers were relocated from the business factory to an outdoor yard. Duration matters here, as they remained positioned in the open for several weeks, during which extreme heat took its toll.

Hollard Insurance identified heat as the culprit and argued that an "oven effect" raised the internal temperature of these enclosed containers to as much as 50-60 degrees Celsius in warm conditions. According to the Bureau of Meteorology, the business location had multiple days exceeding 27 degrees Celsius, hinting at significant exterior influence.

Supporting the insurer's stance, the pool cover supplier acknowledged that the type of damage incurred typically aligns with temperature fluctuations, thereby highlighting an overlooked vulnerability in container storage without adequate temperature control.

The exemption referenced by Hollard centers on excluding coverage where loss occurs due to "variation in temperature." Insistently, the claimant outlined that these variances were consequential to the containers being stationed outdoors, not due to ambient temperature destabilization at any given point.

The business owner contended that proper ventilation was in place, enhancing his argument that the incident was an accidental anomaly. Nonetheless, the Australian Financial Complaints Authority concluded, through evidence, the heart of the issue was indeed temperature variation-induced damage.

In the words of the ruling's ombudsman, “In this case, the pool covers were exposed to variations in temperature when the shipping containers were moved from the factory to the yard, and when they were subjected to variations in the external temperature.” This commentary PM underscores a foreseeable yet underestimated hazard of transferring goods without accounting for temperature shifts.

Further elaborating, they stated that, “These variations include an increase in temperature sufficient to cause damage to the covers. I also acknowledge the complainant says the shipping containers were ventilated. But the ... shipping containers had clearly increased to a high enough temperature to cause the damage, regardless of whether they were ventilated or not.”

This outcome emerges from critical interpretation of insurance policy exclusions, leading to Hollard's rightful denial of the claim. The exhibitive concordance among influencer feedback and data from sources such as the Bureau and product suppliers reiterates a nuanced understanding in managing similar risks in the future.

Original source: Insurance News.

Published:Thursday, 5th Dec 2024
Source: Paige Estritori

Share this news item:

Insurance News

Clear

National Climate Risk Assessment Unveils Growing Insurance Challenges

17 Sep 2025: Paige Estritori

The Australian government has unveiled its inaugural National Climate Risk Assessment alongside a comprehensive National Adaptation Plan, highlighting the heightened impact of natural disasters on insurance accessibility across the nation. With an urgent call to action, the government acknowledges the impending climate threats and commits to intensifying efforts towards emission reduction. - read more

ASIC Extends Relief on Distribution Rules for Insurance Providers

16 Sep 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has announced an extension of the exemption allowing general insurance providers to forego appointing product distributors as authorised representatives. This decision comes with the introduction of a new legislative instrument, 2025/520, which renews the previous framework, originally established under instrument 2015/682. The relief will now continue until August 27, 2030. - read more

Cyber Insurance Becomes Essential Amid Rising Digital Threats

12 Sep 2025: Paige Estritori

The recent cyberattack on Fortnum Private Wealth, accompanied by ASIC's legal action, has spotlighted the critical risks cyber threats pose to financial advice companies in Australia. With digital integration intensifying across the finance sector, the owner of Fortnum, Entireti, plans to defend the case, underscoring the necessity for ongoing vigilance in cybersecurity measures. - read more

Swiss Re Foresees Rising Premiums Amid Increasing Global Risks

10 Sep 2025: Paige Estritori

In a comprehensive analysis, Swiss Re Institute predicts that global property and casualty insurance premiums will rise in tandem with GDP over the upcoming decade. This growth is driven by amplified natural catastrophe losses, asset accumulation, and heightened economic and litigation claims inflation. The institute's report outlines the evolving insurance landscape amid increasing global risks. - read more

Insurance Council of Australia Assists NSW Flood Claimants

09 Sep 2025: Paige Estritori

In response to the devastating floods that swept across New South Wales' Mid North Coast in May, the Insurance Council of Australia (ICA) is taking proactive steps to support the affected residents. Insurers, organised by the ICA, will be meeting with flood victims in Kempsey, Taree, and Port Macquarie to provide guidance and support as they navigate their insurance claims. - read more

Ombudsman Upholds Policyholder’s Claim Despite Fraud Allegations

08 Sep 2025: Paige Estritori

A motor insurance policyholder has won a significant dispute over fraud allegations, with the industry ombudsman ruling in favour of a payout following a controversial car accident claim. The case revolved around an incident where the claimant's wife crashed at an intersection one evening, reportedly failing to yield. The lack of photographic evidence due to shock and subsequent involvement of towing services complicated matters. - read more

Click for more Insurance News