A beauty salon owner whose trade was affected by repeat firebombings in his street has successfully challenged his business interruption payout.

The first attack was on May 17 2024 – just five weeks after the salon opened – followed by further incidents on May 30 and 31, which forced the business to cease operations.

Insurer QBE paid out $52,054 for the BI loss, but the owner wanted $113,000 plus interest and took his case to the Australian Financial Complaints Authority.

The complainant said QBE made “fundamental errors” in calculating the payment from income information provided.

AFCA agrees there are errors in QBE’s loss adjuster’s calculations, but it adds the complainant’s figures also do not stack up.

It says the policy allowed for $35,000 in claim cost expense cover, and this should have been flagged.

Related article: Landlords out of options in push for drugs lab payout

“Despite indications that the complainant was struggling with how to calculate its BI loss, there is nothing before the panel to show that the insurer informed the complainant of that cover,” AFCA says.

“The panel considers that it should have and that its failure to do so has materially contributed to the dispute that has developed.”

It says the complainant should now engage a forensic accountant to calculate the loss and the insurer must pay the assessed amount.

AFCA has also awarded the complainant $3000 in non-financial loss compensation.

The businessman described how the insurer’s conduct left him “financially crippled, emotionally drained and professionally compromised. The psychological toll of enduring this process while trying to keep our brand and community trust intact cannot be understated.”

AFCA said: “The insurer’s poor claim handling unnecessarily caused [the business owner] major stress and inconvenience.”

See the full ruling here.