Heat Claims Denied: Insurer Cites 'Oven Effect' in Container Dispute

5

Earlier this year, the business owner observed deformation and melting of the pool covers, which transpired shortly after the containers were relocated from the business factory to an outdoor yard. Duration matters here, as they remained positioned in the open for several weeks, during which extreme heat took its toll.

Hollard Insurance identified heat as the culprit and argued that an "oven effect" raised the internal temperature of these enclosed containers to as much as 50-60 degrees Celsius in warm conditions. According to the Bureau of Meteorology, the business location had multiple days exceeding 27 degrees Celsius, hinting at significant exterior influence.

Supporting the insurer's stance, the pool cover supplier acknowledged that the type of damage incurred typically aligns with temperature fluctuations, thereby highlighting an overlooked vulnerability in container storage without adequate temperature control.

The exemption referenced by Hollard centers on excluding coverage where loss occurs due to "variation in temperature." Insistently, the claimant outlined that these variances were consequential to the containers being stationed outdoors, not due to ambient temperature destabilization at any given point.

The business owner contended that proper ventilation was in place, enhancing his argument that the incident was an accidental anomaly. Nonetheless, the Australian Financial Complaints Authority concluded, through evidence, the heart of the issue was indeed temperature variation-induced damage.

In the words of the ruling's ombudsman, “In this case, the pool covers were exposed to variations in temperature when the shipping containers were moved from the factory to the yard, and when they were subjected to variations in the external temperature.” This commentary PM underscores a foreseeable yet underestimated hazard of transferring goods without accounting for temperature shifts.

Further elaborating, they stated that, “These variations include an increase in temperature sufficient to cause damage to the covers. I also acknowledge the complainant says the shipping containers were ventilated. But the ... shipping containers had clearly increased to a high enough temperature to cause the damage, regardless of whether they were ventilated or not.”

This outcome emerges from critical interpretation of insurance policy exclusions, leading to Hollard's rightful denial of the claim. The exhibitive concordance among influencer feedback and data from sources such as the Bureau and product suppliers reiterates a nuanced understanding in managing similar risks in the future.

Original source: Insurance News.

Published:Thursday, 5th Dec 2024
Source: Paige Estritori

Share this news item:

Insurance News

Clear

ASIC Challenges Federal Court's 'Fair Term' Ruling 09 Jul 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) is appealing a Federal Court decision regarding the wording of a 'pre-existing condition' clause in certain HCF Life insurance products. The court previously determined that while the wording had the potential to mislead consumers, it did not constitute an unfair contract term under the current laws set out in the ASIC Act 2001. - read more

ICA Advocates for Strata Law Reform in the ACT to Enhance Building Management 08 Jul 2025: Paige Estritori The Insurance Council of Australia (ICA) is urging the Australian Capital Territory (ACT) to adopt strata transparency regulations, aiming to enhance oversight of building repairs and maintenance by owners’ committees. This call was made during a parliamentary inquiry, where the ICA pushed for measures akin to recent legislative changes in New South Wales. - read more

Tasmanian Government Insurance Proposal Faces Industry Backlash 07 Jul 2025: Paige Estritori The Tasmanian government's recent proposal to establish a state-run insurance entity has drawn significant criticism from key players in the insurance industry. The plan, spearheaded by Premier Jeremy Rockliff, aims to expand the Motor Accidents Insurance Board into a broader service named TasInsure, offering products including home and contents insurance, small business coverage, and more. The RACT, a major player in Tasmania's insurance sector, expressed considerable concern, labelling the initiative as a simplistic answer to complex problems. - read more

Asbestos Scare Leaves Hospitality Business Uninsured 04 Jul 2025: Paige Estritori 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. - read more

Landmark NSW Decision: Dog Walking Costs Covered in Car Crash Injury Claims 03 Jul 2025: Paige Estritori In a groundbreaking decision by the NSW Personal Injury Commission, an insurer has been directed to cover the costs of dog walking services for a car crash victim. The commission ruled that these services classify as domestic assistance under the state’s Motor Accident Injuries Act. This case could pave the way for broader interpretations of 'attendant care services' for claimants. - read more