Insurer Required to Honour Arson Claim Amidst Director's Undisclosed Criminal Past

The case involved a restaurant and takeaway business insured by QBE. In August 2024, an arson attack destroyed the business's contents and halted operations. QBE denied the claim, alleging that the director's criminal convictions were not disclosed during policy inception.

The director contended that the omission was unintentional and offered to pay any additional premiums resulting from his criminal history. However, QBE maintained that disclosure would have led to a refusal to insure.

AFCA found that QBE could not provide evidence of the specific questions asked during the policy's inception, as the broker used an electronic platform linked to QBE's systems, and no screenshots were provided. Without clear evidence of the questions posed, AFCA determined that QBE failed to establish that the director had a duty to disclose his criminal history.

Consequently, AFCA ordered QBE to reinstate the policy and process the claim in accordance with its terms and conditions. This ruling underscores the importance for insurers to maintain comprehensive records of disclosure processes and for policyholders to ensure full transparency during policy applications.