A jeweller has lost a claim dispute with Berkley Insurance after a credit card payment for a watch it sold was later reversed by a bank.

The watch was sold on May 12 last year. Payment was received two days later and a courier delivered the timepiece to the buyer and verified the recipient’s identity.

But the payment was reversed 10 days later because the sending bank said the card transaction was unauthorised.

The seller told the Australian Financial Complaints Authority the loss should be covered under “stock outside your premises” and “stock being personally conveyed” clauses in its jewellers block policy.

But an AFCA member, while accepting the claimant “suffered a financial loss through no fault of its own”, said: “The complainant still has to show the loss arose from a covered event.

“It has not done that because the watch had already been delivered and the loss does not fit any of the limited cover provisions for stock outside the insured premises.

“The insurer is entitled to deny it.”

Cover for stock outside the insured premises was limited to: being personally carried by an employee; left in a hotel room; taken home by an employee; being worked on; or being worn outside the premises by an employee.

“None of these situations apply,” the ombudsman said.

The policy schedule also included a sending extension covering stock while in transit, but this ended upon receipt by the buyer.

See the ruling here.