A Victorian broker is on the hook for $9.68 million after failing to pass on two renewal offers that would have insured a warehouse before it burned down.
The Supreme Court of Victoria handed down its decision on May 22, 2026 in Danbol Pty Ltd v ACN 007 198 343 Pty Ltd, formerly known as Griffiths Goodall Insurance Brokers Pty Ltd. The judgment ends a six-year professional indemnity dispute over one of the most resource-intensive fires Victoria has seen since 1991.
Danbol owned a 14,000-square-metre warehouse at 420 Somerville Road in Tottenham. It carried industrial special risk cover through the broker, with Pen Underwriting writing on behalf of Swiss Re. The policy was due to expire at 4pm on August 24, 2018.
The tenancy at the site had just changed. A new occupier, Delacor Pty Ltd, was said to be storing decommissioned gas bottles. On the morning of expiry, Pen told the broker it would not renew. It was unsure whether decommissioning was happening at the property. To keep cover in place, Pen offered a 14-day extension for a small premium at around 10am that day. The broker never told Danbol.
A few days later, after the broker clarified that the bottles were decommissioned before arriving on site, Pen offered a 12-month renewal on August 29, 2018. The broker did not pass that on either. The next day, on August 30, 2018, the warehouse caught fire.
The Inspector-General for Emergency Management reported that the blaze drew the largest amount of resources of any Victorian fire since the Coode Island petrochemical fire in 1991, including more than 60% of the Metropolitan Fire Brigade's active operational fleet, with support from the Aviation Fire Fighting Service. It took about 17 hours to bring under control and nearly two weeks to extinguish.
Delacor had not been storing only decommissioned gas bottles. It had been storing large quantities of flammable liquids in an unsafe and illegal manner. Danbol's earlier action against the insurer failed - no contract had come into existence. So Danbol sued the broker for the indemnity it would have had if cover had been in place.
The broker accepted that its conduct was negligent. It accepted that a reasonable broker would have recommended both the 14-day extension and the annual renewal offer, and that Danbol would have accepted at least the 14-day offer. The dispute came down to causation.
The broker argued the insurer would not have paid in any case. The actual use of the property, it said, was an alteration of use after the policy started, letting the insurer refuse the claim. It also argued that any policy would have rested on misrepresentations about what the tenant was doing.
The policy contained an alteration condition saying the insurer would not be liable for loss "caused or contributed to by any alteration after the commencement of this Policy ... in the trade or processes of manufacture carried on at the Premises or whereby the nature of the occupation or other circumstances affecting the Premises and/or the Insured's property therein contained shall be changed in such a way as to increase the risk of loss, destruction or damage". Section 54 of the Insurance Contracts Act 1984 (Cth) reshapes how an insurer can rely on a clause like that. Under s 54(2), if the act could reasonably be regarded as capable of causing or contributing to a covered loss, the insurer may refuse to pay.
Justice Osborne walked through the timeline. He found the flammable chemicals did not arrive at the site until around August 27, 2018. That was after 4pm on August 24, the start date of a first hypothetical policy that would have come into existence if the broker had accepted the 14-day extension. It was before a second hypothetical policy, which would have started between 1pm and 5pm on August 29.
The timing decided the case. Under the first hypothetical policy, the alteration of use happened after commencement, so s 54(2) gave the insurer a defence. Under the second, the alteration happened before commencement, so it did not.
On misrepresentation, the broker pointed to s 28 of the Act. It argued Danbol had no reasonable basis to believe the tenant would only store decommissioned gas bottles. The court disagreed. The tenant had told Danbol nothing flammable would be stored. The lease said the same. Danbol had inspected the site with council officers. Justice Osborne found Danbol had a reasonable basis for what it told the insurer, and the insurer could not have reduced its liability to nil.
The broker also faced a wider negligence claim - that it should have arranged an independent survey of the premises earlier. The court rejected that too. The judge preferred the broker's expert and found the broker's conduct was widely accepted in Australia by a significant number of respected practitioners as competent professional practice. That engaged the peer professional opinion defence under s 59 of the Wrongs Act 1958 (Vic).
Judgment was entered for Danbol for the sum insured of $9.8 million, less the $118,809 premium Danbol would have paid on the second hypothetical policy. That came to $9,681,191. The court said it would hear the parties on interest and costs.
For brokers and their professional indemnity insurers, the case is a sharp reminder that accepted negligence is only the start. Whether the policy would have responded turns on the timing of the relevant act, the strength of the insured's representations, and the standard of broker conduct. A few days, in this case, made the difference between cover and no cover.
