IFSO Case Study

The insured had cover for his mobile business assets.

In February 2019, he was contracted to water blast a school. The water blaster and its accessories were secured to a purpose-built trailer and stored within a toolbox which was bolted to the same trailer. The trailer was not fully enclosed and had an open top.

He left the trailer outside the school overnight. It was secured to a fence with padlocks and chains. However, bolt cutters were used to cut through the padlocks to steal the water blaster and its accessories from the trailer. The insured made a claim for the loss.

The insurer determined the trailer was not fully enclosed, so it did not fall within the definition of a vehicle or storage container in terms of the policy. Therefore, the loss was outside the scope of cover and the insurer declined the claim.

He disputed this decision, on the basis that he had done everything correctly to ensure the equipment was securely locked. He said it would have been difficult to remove the equipment without the appropriate tools and force would have had to be used to take the items. Therefore, he should have been covered under the terms of the policy.

The case manager’s assessment

Generally, it is up to an insured person to read and understand the terms and conditions of the policy. If the insured is not satisfied or does not accept the terms provided, it is his/her right to seek insurance elsewhere.

In 2015, the policy was updated to include the optional policy extension for “theft cover”. Under this extension, the loss for the insured property would have been covered. However, the insured did not choose to add the extension to his policy.

The policy provided burglary cover for “sudden and accidental loss”, involving physical evidence of violent and forcible entry into a “securely locked motor vehicle or storage container”. The policy also included the option to add on theft cover as a policy extension.

The trailer did not constitute a motor vehicle or storage container within the ordinary meaning of the words. Therefore, the open top trailer was not within the scope of cover provided and the insurer was entitled to decline the claim.

Sept 2019

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