Insurer has ‘obligation’ for $500k historic repairs

Insurer has ‘obligation’ for $500k historic repairs | Insurance Business

Insurer has ‘obligation’ for $500k historic repairs
Insurers have an “obligation” to foot the bill for repairs to a storm-damaged historic wharf, a New South Wales minister has said.

The historic wharf at Tathra, on the far south coast of New South Wales, was damaged during a severe storm earlier this year and the Bega Valley Shire council is now faced with a $500,000 repair bill.

Infrastructure minister Andrew Constance has called on the insurer, Statewide Mutual, to stump up the repair bill.

“They have an obligation,” Constance said, according to the ABC.

“They need to meet it. Hurry up and do it. This is why we have insurance.”

Statewide Mutual had informed the council that normal actions of the sea were excluded from the policy. Executive officer for the insurer Naamon Eurell, confirmed that this exclusion was in the policy and said that he is unaware of any council with insurance for actions of the sea.

“I’ve never had to go to our re-insurers and say: ‘is this particular cover available on the market for these types of assets?’” Eurell said.

“None of the councils who participate in our scheme have that particular cover.”

Constance, who is also Member for Bega, said that local residents have a right to be angry with Statewide as he confirmed that the wharf is the responsibility of the council.

“I’m not going to wave taxpayer dollars in front of an insurer that should meet its obligation. Full stop. No excuses,” Constance continued.

“They have an obligation to meet our community expectations and deliver back to the community.

“I think it’s well within the community’s right to be quite angry with this insurer.”

The heritage wharf is not protected under the jointly-funded Commonwealth-State Natural Disaster Relief and Recovery Arrangements (NDRRA) as it is not classified as critical infrastructure.

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  • Ian Jones 2016-11-09 1:40:26 AM
    With 30 years experience, it has always been my understanding that Actions of the Sea are a general exclusion across pretty well every insurers policy - Bus Pack or ISR (unless caused by earthquake or seismic activity i.e. Tsunami). Maybe someone needs to give the Minister an insurance wording lesson 1 on 1. I would think he needs to cop it on the chin rather than try to shift the blame onto the insurers. They have NO obligation outside of the policy wording and his blame game does nothing other than heap crap on the insurance industry in general for no substantiated reason.
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  • An Old Broker 2016-11-10 1:43:44 AM
    Some years ago, I was engaged as a broker with a local government authority who owned a wharf/jetty extending into the sea. I alerted the council to the fact that Action of the Sea was a specific exclusion and noted that if they wanted me to obtain the cover it would be subject to a structural engineers' report on the integrity of the wharf - it also had timber piles - and that the cover would be costly if available. We did secure a market by way of a facultative line into London but subject to the engineer's report and recommendations being complied with. The engineer's report questioned the integrity of the structure which was considered unstable without significant engineering work (including concrete piling)taking place. Without that work being done, wave action damage over time was considered inevitable. I attended the council meeting and outlined the situation however, council declined to do the remedial work on the wharf and thus i had to advise that 'risk transfer' was not achievable. Subsequently, we lost that business and another intermediary took it over and told council that action of the sea was not a problem but never asked to see the engineer's report. Should we get a big blow the wharf could go and I have no doubt there will be another fight once the undisclosed materiality of the engineer's report becomes known. There you go !
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