A supermarket has failed to win $230,000 compensation from Gallagher, which it accused of causing a blowout in its liability insurance premiums and forecast “elevated pricing for seven to 10 years”.

It said Gallagher failed to engage with specialist supermarket underwriters, and told the Australian Financial Complaints Authority the broker was “excessive” in disclosing nine years of claims history.

A gap in liability insurance for almost five months in 2023 also left it exposed to legal costs, it argued.

Gallagher admitted its renewal communication did not meet expected standards and offered to consider with “utmost seriousness” responsibility for any liability claims arising during the uninsured period. But it denied the liability cover gap was avoidable.

It approached multiple underwriters after the supermarket’s insurer advised Gallagher in mid-2023 it would not renew “due to the claims history” after expiry of the 2022-23 policy – which had a premium of $15,403, of which about $7000 was for liability cover.

The underwriters either declined to quote for supermarkets in general or because the complainant had made 18 claims – including three under its liability cover since 2015, one for a slip and fall that was closed in 2023 for $150,000.

Gallagher’s approaches to insurers in 2023 yielded only one indicative premium for liability cover, which was more than $70,000 with an excess of $50,000 and was not presented to the client.  

The broker sent a new annual policy – with machinery breakdown and electronic equipment cover – in an email to the supermarket in September 2023. There was no promised in-person presentation.  

AFCA says Gallagher breached its professional duty of care, failing to take “professional and timely steps” because it did not inform the supermarket about the non-renewal for about three months.

But this did not cause the supermarket loss, and the offer to consider covering future legal action was “reasonable and fair compensation for its conduct”.

“The broker is not required to pay the complainant compensation,” the ombudsman said.

After being without liability insurance from the start of July 2023, the supermarket engaged a different broker, which arranged cover from November 20 to mid-2024 with the original non-renewing insurer at an $8453 premium for $10 million liability cover.

The supermarket accused Gallagher of undertaking “no meaningful work” on its file at renewal time, approaching few insurers and demonstrating “a lack of care, urgency and professional diligence given the distressed nature of the placement”.

It said Gallagher “holds itself out as a specialist broker with knowledge, experience and market access in the supermarket sector but did not leverage its relationships or ... maintain proper records”.

It said it was left with higher excesses, a restricted insurer market and narrowed policy conditions, and was paying $31,790 for its current standalone liability policy for the year to April 2026.

See the ruling here.