A former publican has gone on trial in the NSW District Court accused of torching his own hotel for an insurance payout, in a case that has put the spotlight on one of the oldest red flags in the underwriting playbook — a sharp, unexplained increase in cover shortly before a total loss.
Prosecutors allege David Robert Culican deliberately set fire to the Globe Hotel in Bombala in June 2022, after lifting the maximum value of the pub's contents insurance policy in the months leading up to the blaze. The 42-year-old has pleaded not guilty to dishonestly damaging property by fire or explosive for gain, and to an alternative charge of damaging property valued at more than $15,000.
The trial opened this week before Judge David Scully at Queanbeyan District Court and is expected to run for ten days.
The Crown's case turns heavily on a single underwriting decision. The court heard Mr Culican increased the sum insured on the pub's contents policy from $180,000 to $480,000 in November 2021 — a near-tripling of the maximum payout roughly seven months before the fire.
Accordong to an ABC News report, Crown prosecutor Ms Mackenzie told the jury the uplift "created an incentive" to destroy the contents of the property, alleging the accused was under financial pressure from the COVID-19 pandemic and a rival hospitality venue in town.
"The accused's profits were heading out the door at a rate the accused couldn't seem to stop," Ms Mackenzie told the court, alleging Mr Culican stood to "walk away with a handy little insurance payout."
The defence has offered a sharply different reading of the same paper trail. Barrister Richard Thomas told the jury his client lifted the sum insured for legitimate commercial reasons, after new owners took over the building and the existing policy no longer reflected the money that had been ploughed into the premises.
"He'd invested quite a lot in the property and that wasn't reflected in the insurance policy," Mr Thomas told the court.
Mr Thomas also urged the jury to reserve judgement until all expert fire-cause evidence had been heard, noting "there were a range of possible accidental causes for the fire" and that no witness would testify to seeing his client light it.
For the broker community, the case is a live courtroom demonstration of the scrutiny that follows a mid-term increase in cover when a claim lands soon afterwards. Insurers and loss adjusters routinely flag significant changes to sums insured in the months preceding a loss.
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It also underlines the importance of brokers documenting the commercial rationale behind any uplift. Renovations, new fit-outs, ownership changes, revaluations and stock build-ups are all defensible reasons to revise a contents policy. But as this case illustrates, the absence of a clearly recorded justification can leave a client exposed to allegations that the increase was opportunistic rather than prudent.
Hospitality remains a particularly sensitive class. Pubs in regional towns often carry irreplaceable fixtures, owner-occupier living arrangements and concentrated stock — all of which complicate both valuation conversations and post-loss investigations. The Globe Hotel, built in 1857 and a fixture on Bombala's main street, had to be demolished after the fire.
Beyond the policy movement, the Crown is leaning on CCTV evidence. The court was told Mr Culican was allegedly captured on camera "wearing a balaclava and also carrying a blowtorch" near the pub at about 4:13am on 25 June 2022, and was seen earlier "moving large amounts of personal items" around the building. Nearby campers raised the alarm with a Triple Zero call at 4:19am, and authorities took hours to bring the blaze under control.
The accused has denied lighting the fire and suggested it may have been caused by a gas heater. The defence has also rejected the prosecution's characterisation of a struggling business, telling the court Mr Culican was rearranging stock in preparation for a possible lease change.
A series of witnesses are expected to give evidence over the course of the trial.
