A paint manufacturer has been denied a payout after its product “turned to gel”, because the complaints authority has found contamination or incorrect ingredients were to blame.  

The business made a product damage claim last February after a batch of its paint turned out thicker than usual and could not be sold.  

It provided documents showing it made the paint to its usual formula, and none of the raw ingredients were unaccounted for or recalled for being defective.  

The company said it tried to thin the paint, but this did not work. It suggested the damage was due to a chemical reaction caused by above-normal temperatures in its warehouse.  

But an expert for insurer IAG said overheating would have dried the paint rather than leading to a gel-like texture.  

The expert determined an error in the use of cellulose ether – an additive that can affect paint’s viscosity – was to blame.

In a dispute decision, the Australian Financial Complaints Authority finds abnormal conditions during storage did not cause the damage, because only one batch was affected.  

It says the evidence, while not definitive, suggests the defect arose “either through a contamination of ingredients used or incorrect ingredients used ... The policy is clear, the cost to rectify inherent or latent defects, defective materials or faulty workmanship are excluded under the policy.”  

See the ruling here.