Business Pack: Hair Salon

Water leaked from the hot water tank and flooded an insured hair salon when the defective shut-off safety valve failed to shut off. The salon owner estimated around $20,625 worth of damage to their business contents, and they lodged a claim against their Business Pack, which had a Contents coverage limit of $20,000.

A loss adjustor was assigned by the insurer to assess the extent of the damage and the necessary steps for fixing it. During their assessment, a discrepancy in the insured amount declared was found. The total value of contents on premises was $40,000—significantly different from the $20,000 declared Contents limit.

A builder quoted $7,895.18 for removing damaged flooring, mould inspection, replacing skirting boards, and painting. The claim was accepted, as the damage was caused by an insured event, but the insurer invoked the policy’s underinsurance clause. The insurer paid just $4,354.51 for rectification works.

The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Coverage for claims on the policy will be determined by the insurer, not BizCover for Brokers.