A zoo has been denied a payout for the death of a saltwater crocodile, because its business insurance policy excluded live animals.

The animal died after a storm caused a power outage, disabling the heating system in its enclosure.

QBE accepted a claim for building damage but rejected a separate claim for the crocodile.

The zoo operators – represented by their broker – disputed the decision, seeking $15,000 for a new crocodile and $21,589 for freight and crate handling.

They argued the reptile enclosure was a specified insured item, covered for $200,000, and the crocodile’s death was a direct consequence of storm damage affecting its function.

They also argued animals were commercial assets and should be treated as stock for insurance purposes.

But the Australian Financial Complaints Authority has backed the insurer, saying the live animal exclusion was clearly stated and the crocodile was not stock, which the policy defined as goods intended for sale or use in production.

More from AFCA: Ombudsman says nay to insurer’s horse play

AFCA says the reptile enclosure’s cover did not extend to animals housed in it, and the policy’s general property section covered only specified portable items, including animal equipment and tools.

The zoo’s broker complained QBE “knowingly insured a zoological garden yet offered no live animal cover or warning, defeating the commercial purpose of the property”.

But the ombudsman says it is up to a customer to check a policy suits their needs.

“While I accept the complainants may have expected the policy to respond in these circumstances, those expectations cannot override the terms of the insurance contract”, an AFCA member said.

The ombudsman says QBE was entitled to decline the claim but notes its ruling concerns only the insurer’s role.

“I have not considered the actions of any other party, including the broker.

“If the complainants consider they may have a claim against another party, they are able to pursue that separately.”

See the ruling here.