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Insureds lose dispute after dog attacks business customer at home

Complainants who sought legal liability cover following a dog attack on their property have lost their claims dispute after an Australian Financial Complaints Authority (AFCA) ruling found that the incident arose due to business activities excluded by the policy. 

The claimants held a home and contents policy with legal liability cover that provided financial protections for any injuries or damages that occurred to others at the property.

They lodged a claim after a person visiting the property to receive skin tanning services, referred to as S, was attacked by a dog in December 2021.

AFCA said that the available information showed that as S approached the homeowners’ door, the dog escaped the home and bit the visitor’s foot, causing her injury. She began legal action against the complainants to cover medical expenses and damages after she was unable to work for a week. 

Suncorp declined the claim, saying that the policy held exclusions for events caused by or connected to any business activity occurring on the property. The insurer also sought to cancel the policy from inception.

The complainants argued that S was not allowed to enter the property without their permission and that the incident did not arise due to an act or omission on their behalf.

AFCA acknowledged the homeowners’ opinion that the injury was caused by an “unintended and unexpected attack” but said the dispute focused on whether the incident was connected to the business they were operating from their property.

“The question is, whether this incident can reasonably be accepted to be caused by, connected with or arising from the complainants’ business,” AFCA said.

The ruling said there was “no dispute” that the injured party attended the property for a paid skin tanning appointment and agreed with the insurer’s assessment that the event arose due to the homeowners’ business operations. 

“I am satisfied it is fair to accept that S’s attendance and presence at the insured property arose from or was connected to the business activities being conducted at the insured property,” AFCA said.

“I do not agree with the complainants’ position that S was not invited or instructed to enter the insured property.

“Rather, given she was booked in for an appointment at the insured property, it is reasonable to accept she was invited to attend the business premises (insured property) for her appointment.”

AFCA said it was fair for Suncorp to handle the claim within the provisions outlined within the policy.

The ruling noted that Suncorp also intended to rely on a duty of disclosure breach relating to the homeowners’ failure to tell the insurer that it was operating a business at their home, but said it would not be fair as Suncorp only raised this issue after the matter was taken to AFCA.

It said that if the parties intended to dispute the disclosure breach, the matter should be considered a new issue and go through an internal dispute resolution process before being referred to AFCA.

Last year, reported on concerns that many Australians could invalidate their home and contents cover by running "side-hustles" from their homes.

Click here for the ruling.