Izzy works for a mining company that has a commercial motor vehicle insurance policy with the insurer. Izzy 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 Izzy to tighten the bolts before using the excavator again.
Three days later, Izzy used the excavator. Izzy checked the bolts by hand before starting the excavator. While Izzy was operating the excavator, the bolts came loose, and the excavator suffered extensive damage.
Izzy submitted a claim to the insurer under the company’s commercial motor vehicle policy. The insurer declined Izzy’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.
Izzy complained to FSCL in May 2023.
Izzy disagreed with the insurer’s decision to decline her claim. Izzy said that she did not forget to tighten the bolts before operating the excavator on the day it failed. Izzy 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 Izzy’s claim.
We looked at the insurance policy wording and Izzy’s emails with the insurer.
We concluded that it was reasonable for the insurer to decline Izzy’s claim. We thought that the insurer had correctly applied the policy exclusion. We did not think Izzy had complied with industry standards by checking that the bolts were hand tight. Izzy should have used a tool to check the bolts’ tightness, like the mechanic had.
We said that Izzy should discontinue her complaint. Izzy disagreed with our decision but did not provide any further information to change our view.
Insights for consumers
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.