A food delivery business has lost a dispute with its broker after a break-in at a property not listed on its insurance schedule.

Distractions such as being evicted from another premises did not excuse the company from confirming its policy documents were correct, as broker SRG Financial Solutions had “specifically asked”, the Australian Financial Complaints Authority says.

Records showed there was no request before the January 2019 theft to add the “R Street” site, which the business leased to store more than 80 e-bikes and the food delivery operation.

“The proximate cause of the complainant’s loss is its failure to provide instructions to add R Street as an insured location,” the ruling says. “I am not satisfied the complainant told the broker about R Street or asked that it be added to the policy.”

Business items in a storage shed at R Street were damaged or stolen, as were several e-bikes chained together in a fenced outdoor area.

The claim was denied by the insurer, and the business ultimately collapsed.

The company’s director said SRG failed to arrange suitable cover or follow his business’ instructions, and he sought compensation for loss of income and time spent pursuing the broker.

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While acknowledging policyholders have a responsibility to review insurance documents, the director said that in the months before the thefts he was under “extreme stress and operational duress” due to the eviction, and his “mental bandwidth was already pushed to the absolute limit”.

He should not be held accountable for not reviewing the policy in detail because a qualified insurance broker had assured him it all was in order, he said.

“As a lay business operator, we reasonably relied on the broker’s expertise to ensure suitability and compliance,” he told AFCA. “Had the broker flagged this issue, we would have requested amendments or endorsements accordingly. Their failure to warn us constitutes a breach of their professional duty of care.”

SRG documentation showed it made several address amendments in 2018, on the director’s instructions. These were always promptly actioned and a record created.

At no stage was it instructed e-bikes would be stored in the open air, which the policy excluded, SRG said.

SRG was not told the business had been evicted from one site, and when it actioned a request to add a townhouse it sent the endorsed policy via email. No objection was raised to R Street being missing from the policy.

AFCA also says comments by the company director about regulatory issues at a different brokerage where an SRG director previously worked were “irrelevant”.

See the ruling here.