A business has won a dispute over an “open air” exclusion that was applied to its claim for an item stolen from a locked car.

A traverse kit – a piece of surveying equipment – was taken after thieves smashed the car’s rear window at night.

The vehicle was parked in a residential driveway, rather than the business premises listed on the policy covering the equipment.

The policy stated: “We also cover your property insured while temporarily removed to any other premises within Australia ... The maximum amount we will pay for this additional benefit will be 20% of the sum insured.”

But QBE denied the claim, saying its open air exclusion applied because the theft happened outside. The additional benefit for “temporary removal” did not apply because the driveway was not on a listed insured premises.

The Australian Financial Complaints Authority has ruled in favour of the business and its broker.

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“The additional benefit covers theft at premises other than the insured premises. The open air exclusion does not apply because a locked vehicle is not an open space,” AFCA ruled.

“A reasonable person reading the policy would not consider a locked motor vehicle to be an open space. The property was inside a closed and locked vehicle.”

AFCA’s ombudsman says of the policy’s temporary removal clause: “It is reasonable to conclude that the term ‘any other premises’ refers to premises other than those listed as the insured premises in the policy schedule.”

The open air exclusion applied to “loss or damage to property insured from any open space, whether fenced or unfenced, outside the walls of the building”.

QBE said the absence of any reference to motor vehicles did not indicate cover, and purchase of its general property product would have provided cover for theft involving visible damage to a locked vehicle.

But AFCA says the reference to “the building” in the exclusion related only to the insured building and “does not apply to property that is temporarily removed when the policy provides a specific benefit for that situation”.

See the ruling here.