FSCL Case Study

Mandy* arranged insurance for her property maintenance business. In March 2021, Mandy’s property maintenance company secured a new contract to replace a roof. When it was identified that the roof consisted of asbestos, Mandy contacted a specialist asbestos removal company, and they told her that she could remove the asbestos cladding herself. While removing the roof, a workplace health and safety regulator prohibited further work until the asbestos had been removed by a licensed removalist.

Mandy explained to her insurance advisers that due to the roof being partly removed the ceiling had collapsed. Further, roofing iron had been stolen from the site, and the hired trailer was stranded on site, increasing rental costs. Mandy lodged a claim with her insurer for the cost of the damage, which was approximately $85,000.

The insurer declined Mandy’s claim because her policies did not cover costs associated with asbestos removal, as asbestos cover is a specialist type of cover that Mandy had not sought.

Mandy believed that her insurance advisers should have suggested she obtain asbestos cover, but the advisers disagreed. Mandy complained to FSCL.


Mandy did not believe that the adviser asked enough relevant questions to ensure that the policies recommended were appropriate for her business.

The adviser said that they could not predict the need for asbestos cover. Mandy’s property maintenance company was not an accredited asbestos removal company. Further, the scope of work included in the renovation contract was outside the business activities described to the adviser when Mandy last updated her business details.


Mandy’s policies had exclusion clauses for asbestos-related risk so did not cover Mandy’s claim. The issue was whether the adviser reasonably should have offered an asbestos-specific insurance policy.

When Mandy updated her business activities in July 2020, she told the adviser that she would be doing maintenance work on residential properties. The adviser said that Mandy did not mention asbestos removal as part of her intended work. Further, as the business was not accredited to deal with asbestos removal, the adviser did not know that Mandy would do any asbestos-related work.

FSCL noted that the advisers could have had a more in-depth discussion about Mandy’s work but it was not reasonable to expect them to anticipate or ask about asbestos cover due to asbestos removal work being outside the scope of work described by Mandy.


FSCL recommended that Mandy discontinue her complaint.

Mandy agreed to discontinue her complaint.

* name changed

Insights for consumers

The more information consumers share about their needs the better equipped insurance advisers will be to place appropriate cover. Insurance advisers should also take the time to properly understand their client’s needs. However, insurance will not cover all risks and, if a risk is remote, consumers may choose not to take out and pay for additional cover.

March 2023

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