AFCA Directs Insurer to Settle Restaurant Arson Claim

Non-Disclosure of Director's Criminal History Not Grounds for Denial

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The Australian Financial Complaints Authority (AFCA) has recently ruled in favour of a restaurant owner, directing the insurer to honour an arson claim despite the director's failure to disclose a past criminal conviction.

This decision underscores the importance of clear communication and due diligence in the insurance application process.

For restaurant and café owners, this ruling highlights the necessity of full transparency when securing insurance coverage. Non-disclosure of pertinent information can lead to disputes and potential claim denials. However, this case also illustrates that insurers must provide concrete evidence of the questions asked during the application process to justify claim rejections based on non-disclosure.

To mitigate such risks, business owners should:

Ensure all relevant information, including any criminal history, is disclosed during the insurance application process.
Maintain thorough records of all communications and documents exchanged with insurers.
Seek clarification on policy terms and conditions to fully understand coverage scope and obligations.

By adopting these practices, restaurant and café owners can safeguard their businesses against potential disputes and ensure they receive the necessary support in times of need.

Published:Friday, 23rd Jan 2026
Source: Paige Estritori

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

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