FSCL Case Study

Iris* works for a mining company that has a commercial motor vehicle insurance policy with the insurer. Iris regularly operates the company’s excavators.

In August 2022, a mechanic came to the company’s site to repair and service one of the excavators. The mechanic noticed rust on the bolts that secure the excavator’s arm. The mechanic tightened the bolts with a spanner and ordered replacements. Before he left the site, the mechanic told Iris to tighten the bolts before using the excavator again. 

Three days later, Iris used the excavator. Iris checked the bolts by hand before starting the excavator. While Iris was operating the excavator, the bolts came loose, and the excavator suffered extensive damage.

Iris submitted a claim to the insurer under the company’s commercial motor vehicle policy. The insurer declined Iris’s claim. The insurer applied a policy exclusion that said they were not required to settle any claims for damage in connection with an insured’s failure to service the excavator in compliance with industry standards.

Iris complained to FSCL in May 2023.


Iris disagreed with the insurer’s decision to decline her claim. Iris said that she did not forget to tighten the bolts before operating the excavator on the day it failed. Iris said she checked the bolts’ tightness by hand that morning and she was satisfied that they were tight enough.

The insurer said that they were entitled to apply the policy exclusion to decline Iris’s claim.


FSCL looked at the insurance policy wording and Iris’s emails with the insurer.

FSCL concluded that it was reasonable for the insurer to decline Iris’s claim and thought that the insurer had correctly applied the policy exclusion. FSCL did not think Iris had complied with industry standards by checking that the bolts were hand-tight. Iris should have used a tool to check the bolts’ tightness, like the mechanic had.


FSCL said that Iris should discontinue her complaint. Iris disagreed with the decision but did not provide any further information to change FSCL’s view.

* name changed


If there is any doubt about what an insurance policy covers, consumers should reach out to their broker, insurer, or an independent adviser for clarity.

December 2023

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