Insurance Claim Rejected After Flight Crew Timing Violation

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

A traveler who faced a canceled flight due to the flight crew reaching their legal working hour limits will only receive partial reimbursement for his expenses.

This ruling came from an official complaints authority.

The frustrated passenger incurred additional costs when his flight from Palermo to London was unexpectedly stopped because the crew had worked the maximum hours allowed by law. He expected full coverage for these expenses under his travel insurance policy.

However, Lloyd’s Australia, the insurer, denied the claim, stating that the travel policy’s clause on additional expenses and disruption coverage only applies to events such as strikes, riots, hijacks, civil unrest, adverse weather conditions, or accidents involving the mode of transport.

The claimant argued otherwise, insisting that the crew reaching its working hours limit was akin to industrial action such as strikes, implying that the insurer had a too narrow interpretation of the policy's disruption cover. He stated that the restriction on working hours is a precaution to prevent accidents, which aligns with the "spirit of the policy".

Yet, The Australian Financial Complaints Authority (AFCA) did not accept this reasoning.

AFCA pointed out the scant information provided by the claimant which linked the flight cancellation directly to crew working hours being exceeded. They reinforced that this situation is distinct from a strike.

“A strike constitutes a deliberate refusal to work, whereas regulatory limits on work hours are a constraint and not a chosen action,” noted the AFCA's ombudsman. “Additionally, equating flight crew timing regulations with an accident scenario is not fitting, since the clause in question applies to actual incidents happening, not cancellations meant to forestall potential accidents.”

However, AFCA acknowledged a part of the travel policy which offers coverage for scenarios where a flight is delayed over six hours due to uncontrollable circumstances.

Under this provision, the insurer is required to compensate the complainant with the policy’s cap of $2000.

“Although the insurer claims that these circumstances are specifically excluded by the policy, they failed to indicate which exclusion they are relying on and provide justification for triggering it. Therefore, it is unconvincing that the insurer has adequately clarified its entitlement to decline or reduce the claim under this section,” AFCA concluded.

This case was originally reported by Insurance News Australia.

Published:Monday, 9th Sep 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

AMA Advocates for Regulatory Reforms to Curb Health Insurers' Market Power

14 Feb 2026: Paige Estritori

The Australian Medical Association (AMA) has recently highlighted concerns regarding the substantial market power wielded by private health insurers and its potential adverse effects on patient care and healthcare costs. In a position statement released on 4 February 2026, the AMA emphasised the need for regulatory reforms to prevent insurers from exploiting their dominant positions in the healthcare sector. - read more

Declining Value in Private Health Insurance: AMA Calls for Urgent Reforms

14 Feb 2026: Paige Estritori

Recent findings from the Australian Medical Association (AMA) reveal a concerning trend in the private health insurance sector: Australians are facing higher premiums while experiencing diminishing returns on their policies. The AMA's latest Private Health Insurance Report Card, released on 5 December 2025, highlights the urgent need for reforms to address these issues. - read more

Private Health Insurers Under Fire for Premium Increases Despite Government Warnings

14 Feb 2026: Paige Estritori

Private health insurers in Australia are facing mounting criticism for implementing significant premium increases, despite explicit warnings from the Health Minister. This development has sparked concerns about the affordability of healthcare and the practices employed by insurers to maximise profits. - read more

AIA Australia's Commitment to Mental Health: City2Surf Partnership

14 Feb 2026: Paige Estritori

In August 2025, AIA Australia, a leading life, health, and wellbeing insurer, took a significant step in addressing the nation's mental health crisis by partnering with the City2Surf event in Sydney. This collaboration aimed to raise both funds and awareness for mental health, a pressing issue that has seen a notable increase in related insurance claims over recent years. - read more

Click for more Insurance News

Business Insurance Articles

How to Assess Your Risk Exposure and Select the Right Indemnity Coverage

Professional indemnity insurance stands as a pivotal safeguard for Australian professionals navigating the intricacies of liability in their work life. This form of insurance is designed to protect professionals against legal costs and claims for damages arising from acts, omissions, or breaches of professional duty in the course of their practice. Whether it's due to an honest mistake or an unforeseen error, the ramifications of such professional oversights can be financially crippling. - read more

Public Liability Insurance Claims: What to Expect and How to Prepare

When it comes to navigating the complex waters of insurance, understanding public liability insurance claims is crucial for businesses and individuals alike. Public liability insurance serves as a safeguard, protecting against the financial repercussions that arise from accidents or injuries that occur on your premises or through your operations. In this introductory section, we will delve into the essence of public liability insurance and underline its significance. - read more

Professional Indemnity vs Public Liability: What's the Best Choice for Your Small Business?

As a small business owner, understanding the intricacies of liability insurance is pivotal to safeguarding the fruit of your hard work. Insurances such as professional indemnity and public liability are not just safety nets; they are vital components that can mean the difference between bouncing back and closing down following unforeseen legal hurdles. - read more

Liability Risks: What Small Businesses in Australia Should Know

Welcome to our comprehensive guide on liability risks for small businesses in Australia. The world of business is fraught with challenges, and one often overlooked aspect is the array of potential liabilities that can stifle growth or even lead to catastrophic financial loss. It's crucial for small business owners to grasp the critical role that insurance plays in the protection and longevity of their ventures. - read more

Start Here !

Knowledgebase

Coverage:
The amount of risk or liability covered for an individual or entity by way of insurance services.

This website is owned and operated by Clark Family Pty Ltd (ACN 010 281 008) as Trustee for the Clark Family Trust (ABN 35 957 893 714), 43 Larch Street Tallebudgera QLD 4228. Clark Family Pty Ltd is an Authorised Representative (AR 1298860) of Unique Group Broker Services Pty Ltd (AFSL 509434) for financial product referrals and an Authorised Credit Representative (ACR 401491) of Saccasan Pty Ltd (ACL 386297). Check our licensing details on the ASIC registers: Clark Family Pty Ltd ACR, Clark Family Pty Ltd AR, Saccasan Pty Ltd, Unique Group Broker Services.

IMPORTANT: We do not provide financial product advice or credit assistance. We act solely as an introducer and refer enquiries to licensed third-party intermediaries, insurers, and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for validating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.