A dental business earning most of its profits by organising professional development events will have a covid-related claim paid – but only for losses relating to its Brisbane practice.

The business claimed for events cancelled at large hotels in Brisbane and the Gold Coast, disrupted work at locations including a day surgery hospital, and losses at its premises, where it performed general dental work accounting for less than 10% of total turnover.

In a claim dispute ruling, the Australian Financial Complaints Authority has found infectious disease cover applied for the insured premises, opposite a city train station, but not the other activities. Prevention of access cover is also declined.

The complainant said a March 2020 covid outbreak a few blocks from its city premises had a direct and immediate impact, but insurer Hollard argued losses were caused by statewide government-imposed restrictions and cover didn't apply for locations apart from the insured premises.

In its ruling, AFCA refers to the Meridian Travel covid test case, finding that “on the balance of probabilities” losses at the city premises were caused by an outbreak within a 20-kilometre radius.

“Further, consistent with test case 2, I am satisfied that the impact of government restrictions and social distancing requirements arose from the same underlying fortuity as the insured peril,” an ombudsman says.

But AFCA says government restrictions and social distancing rules driven by public health concerns – rather than any particular outbreak – were the “overriding reason” the continuing professional development (CPD) events were cancelled.

Revenue losses mostly resulted from an inability to conduct events and services at function spaces, hospitals and other locations not listed on the business insurance certificate.

Documents describe the insured as a “dentists surgery and dental organisation” and say business means the “occupation described on your insurance certificate carried on at and from the location and all ancillary or incidental occupations and no others”.

The ombudsman says: “I am of the opinion the CPD events do not qualify as ‘dentists surgery and dental organisation’ carried out from the insured premises.”

The professional development events were not “ancillary or incidental” given they provided most of the group’s gross revenue, according to the ruling.

“The insurer is entitled to deny the claim insofar as it relates to loss of gross revenue related to the cancellation of the CPD events and any dental procedures conducted in locations apart from the insured premises, including the hospital,” AFCA says.

The decision is available here.