Local Business Triumphs Over Insurer in Power Outage Dispute

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The wrangle ensued after the butcher, located in Ballina, NSW, suffered power loss during the notorious Northern Rivers floods in early March 2022. This critical blackout resulted in the spoilage of the business's refrigerated stock and cessation of operations.

QBE, the insurance company involved, assigned blame to the torrential flood, fortifying its stance with a hydrologist's account deeming the blackout as a probable ramification of the floods. The narrative was apparently supported by a communication from the electricity provider EE, which highlighted interruptions due to the dire flooding and consequential severe damages to the grid infrastructure.

Challenging this assertion, the aggrieved butcher presented an alternative sequence of events, highlighting an intentional power shutdown orchestrated by EE to maintain civic safety in anticipation of the floods, a singular detail casting doubt on the direct correlation between floodwater and power loss.

This perspective is endorsed by an assessment from the Australian Financial Complaints Authority, casting ambiguity on the initial claims of the energy deficit’s timing and contesting the clear association with the flood event. It recognized that the local network's 'de-energizing' aligned with numerous protective activities spanning from damage assessment to essential community safety precautions.

Moreover, the hydrologist’s conjecture, although initially an aspect of QBE's argument, lacked conviction and specificity. No electrical inquiry was conducted, thus adulterating the assertion that flood-induced blackout was the unequivocal cause of the outage.

In a backdrop of dynamic interpretations, EE’s contemporary accounts marginally united with the insurer's diagnosis but delivered granular details attributing to a more comprehensive, and less flood-focused, synopsis of proceedings.

Debates also kindled around QBE’s assertion over the content benefit of the insurance policy, which covered physical loss or damage but not the 'consequential loss' due to it, suggesting that additional coverage was mandatory to protect against knock-on effects. QBE's stance was that the refrigeration stock damage fell into the latter category. However, the butcher's contention, fortified by the authoritative panel, avers that there was no substantive basis for separating the stock from the core property within the context of this claim.

Concluding the dispute, the authority panel exposed inadequacies in the insurance company’s rationalizations. They reprimanded QBE’s failure to thoroughly elucidate its defense and vehemently supported the butcher's position that the spoilt inventory was indeed covered as direct physical loss. The claim, they decreed, was firmly nestled within the innate protective spectrum of the insurance policy's provisions.

Published:Thursday, 29th Feb 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

ABARES Forecasts Significant Decline in Australian Farm Profits

09 Jun 2026: Paige Estritori

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has released a report forecasting a substantial decline in broadacre farm profits, projecting a 70% decrease to approximately $65,000 per farm. This downturn is attributed to escalating input costs and persistent drought conditions affecting various regions. - read more

Low Adoption of Cyber Insurance Among Australian Farmers

09 Jun 2026: Paige Estritori

Recent research from WFI Insurance reveals that only 25% of Australian farmers are considering cyber insurance, despite approximately 80% of farms now utilising some form of agricultural technology (agri-tech). This disparity highlights a significant vulnerability within the sector, as increased digitisation exposes farms to potential cyber threats. - read more

Integrating Sustainability into Farm Risk Management Strategies

09 Jun 2026: Paige Estritori

In the face of increasing climate variability, Australian agriculture is shifting its approach by integrating sustainability into core risk management strategies. This evolution reflects a broader recognition that environmental stewardship is intrinsically linked to the resilience and long-term viability of farming operations. - read more

HESTA's Initiative to Lower Insurance Fees: A Win for Members

25 May 2026: Paige Estritori

In a significant move to enhance member benefits, HESTA, a leading Australian superannuation fund, has announced an average 12% reduction in insurance fees across all cover types, effective from 1 July 2026. This initiative is part of a broader strategy aimed at providing more accessible and affordable insurance coverage for its members. - read more

Comprehensive All-Risk Insurance Now Available for Large-Scale Australian Farms

17 May 2026: Paige Estritori

Harland Green, a newly established Lloyd's coverholder, has unveiled an all-risk farm insurance package specifically designed for large commercial farming operations in Australia. This initiative aims to address the complex and evolving needs of the agricultural sector by offering comprehensive coverage that encompasses various aspects of farm operations. - read more

New Partnership Aims to Revolutionize Agricultural Insurance in Australia

17 May 2026: Paige Estritori

In a significant development for Australia's agricultural sector, CGU and WFI Insurance have announced an exclusive partnership with Ag Guard, a technology-driven agricultural insurance agency. This collaboration, set to commence in June 2026, aims to bolster the agricultural insurance capabilities of both insurers and enhance digital services for brokers, partners, and customers. - read more

Click for more Insurance News