Asbestos Scare Leaves Hospitality Business Uninsured
Asbestos Scare Leaves Hospitality Business Uninsured
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.
The discovery of asbestos-contaminated mulch in a Sydney park led to the cancellation of a festival, resulting in significant financial losses for a hospitality business.
Despite these setbacks, the company's claim for coverage under its business interruption (BI) policy was rejected.
The business was poised to provide bar services for the event scheduled for February 18 last year but was halted when authorities closed the park due to the health risk. The business argued that its BI policy should cover the losses through an additional benefit clause extending damage cover to customers and suppliers or via a prevention of access provision.
However, Suncorp, the insurer, declined the claim. The insurer highlighted that the policy contained an exclusion for contamination, which the claimant sought to contest by arguing that the contamination was the result of malicious actions. Despite this, Suncorp stated the claimant did not establish that the alleged damage happened during the policy period or “at the premises” of a customer or supplier.
The insurer further clarified that access to the claimant's premises was not directly prevented or hindered, and the park's closure was a precautionary measure due to community health concerns. Consequently, the prevention of access clause was not applicable in this scenario.
The Australian Financial Complaints Authority (AFCA) reviewed the dispute and recognised that asbestos in the mulch may constitute damage. Nonetheless, they pointed out that the contamination could have occurred prior to the insurance period. The claimant failed to produce detailed evidence regarding the connections between their business, the park, and the event organisers. AFCA could not ascertain if the contamination affected premises related to the claimant's business dealings.
AFCA found no malicious intent behind the contamination, noting the NSW Environment Protection Authority conducted investigations, yet did not attribute the incident to deliberate actions. Without concrete evidence of malice, the policy’s contamination exclusion applied.
Ultimately, AFCA decided the prevention of access cover was not triggered since the claimant’s access to their own premises was unaffected directly by the park’s closure. Although the park's shutdown did occur within a stipulated 50km radius of the insured premises, the insurer relied on policy terms to deny the claim. This decision underscores the complexities businesses face in navigating coverage for unforeseen interruptions.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Australian government has approved a 4.41% increase in health insurance premiums, set to take effect in 2026. This adjustment reflects the rising costs associated with healthcare services and the need to maintain the sustainability of the health insurance sector. - read more
The Australian insurance sector is currently grappling with significant challenges, notably the affordability of premiums for consumers. A recent survey by Gallagher Bassett highlights that premium affordability, cybersecurity, and labour shortages are the top concerns for insurers in 2026. ([insurancenews.com.au](https://www.insurancenews.com.au/daily/industry-reshapes-priorities-amid-price-cost-pressures?utm_source=openai)) - read more
The Australian commercial insurance market is witnessing a notable decline in rates, driven by intensified competition and an increase in insurer capacity. According to reports from global brokers Marsh and Aon, the Pacific region experienced a 12% reduction in commercial insurance rates during the last quarter of 2025, marking the most significant drop since early 2024. ([insurancenews.com.au](https://www.insurancenews.com.au/local/commercial-pricing-tipped-to-stay-soft?utm_source=openai)) - read more
The Australian insurance industry has recently faced a substantial decline in profits, primarily due to a series of severe hailstorms that occurred in October and November 2025. Data from the Australian Prudential Regulation Authority (APRA) reveals that the general insurance sector reported a net profit of $132 million in the December quarter, bringing the annual total to approximately $5.8 billion. This marks a decrease from the $6.8 billion profit recorded in 2024. ([insurancenews.com.au](https://www.insurancenews.com.au/local/industry-profit-sinks-as-hail-hits-home?utm_source=openai)) - read more
Liability insurance is a type of coverage designed to protect you from claims arising out of injuries or damages to other people or property. For freelancers, who often juggle multiple projects and clients, liability insurance can offer a safety net that reduces financial risk and instability. - read more
In the fast-paced world of entrepreneurship, the only constant is change, and with change comes the inherent realm of the unknown – risk. Australian entrepreneurs, much like their international counterparts, operate in dynamic environments where unpredictability is a staple. However, the unique economic, legal, and environmental aspects of Australia demand a more localized understanding of these risks. Acknowledging this unpredictability is the first step towards mitigating potential threats to one's business venture. - read more
In today's ever-evolving business landscape, the significance of environmental sustainability and legal accountability is increasingly paramount. Australian enterprises, in particular, are encountering a growing need to understand and manage environmental liability. This reality not only influences corporate image but also carries substantial financial and legal ramifications. - read more
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
Start Here !
Knowledgebase
Depreciation: The reduction in the value of an asset over time, used in insurance to calculate the actual cash value of property.
