Flood loophole sees claims rejected


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30-04-2011 08:13 AM


ABC Canberra 666

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ABC Canberra 666


30-04-2011 08:13 AM



30-04-2011 08:48 AM

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2011-04-30 08:13:52

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JACKSON, Elizabeth




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Flood loophole sees claims rejected -

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Flood loophole sees claims rejected

Matt Wordsworth reported this story on Saturday, April 30, 2011 08:09:00

ELIZABETH JACKSON: Back home now and the inquiry into Australia's most expensive natural disaster
has completed its first week of hearings but there's no end in sight to the problems caused by
south-east Queensland's floods.

Much of the focus has been on the loss of life and the damage to people's homes, but businesses are
also struggling to recover and some are battling their insurance companies.

Our reporter Matt Wordsworth spoke to retailers at one shopping centre who might not get a cent
because of a legal technicality.

MATT WORDSWORTH: Post Office Square is at the very heart of Brisbane, all measurements to and from
the city are taken from the GPO right across the street. It's also at the centre of an insurance
battle that's been raging since water flooded the basement area three months ago.

Because power had to be turned off, essential safety systems like fire sprinklers weren't operating
so the entire centre had to be closed.

For three and a half weeks retailers literally saw trade walk out the door. About 20,000
pedestrians used the centre as a thoroughfare each day.

Lena Friscia, who runs the bakery, has been informed she will not be covered.

LENA FRISCIA: I was very, very angry, very you know, I just did not need to read that letter
because I do have business interruption, whether it was rain, hail or shine outside. I was not
allowed in my premises.

MATT WORDSWORTH: And how long have you been in the business there?

LENA FRISCIA: Thirteen years.

MATT WORDSWORTH: And so you've been paying this insurance for 13 years?

LENA FRISCIA: Thirteen years.

MATT WORDSWORTH: And is this the first time you've sought to make, so first time you've tried to

LENA FRISCIA: Absolutely, yes.

MATT WORDSWORTH: And what did they tell you?


MATT WORDSWORTH: Her insurer says it's because water didn't inundate her business.

Jordan Cowen, who owns the newsagency in Post Office Square, is facing a similar problem.

JORDAN COWEN: It's a little tough that not only are we trying to put our claim forward, but you're
trying to get your business up and going again.

Everybody's struggling at the moment, we don't have the trade that we did have, a) because of the
floods and you know, now it's something that at the same time, they're making you put together your
gross profit forecast, what were going through your point of sale system from last year, going
through your profit and losses from last year.

They don't make it easy, you know what I mean? We've had to employ an accountant, you know to go
through it and these are just extra costs. It all kind of starts mounting up on top of just trying
to get your business back to some form of normality.

MATT WORDSWORTH: The landlord has waived the rent for that period of the closure but Mr Cowen says
it's the income that's crucial, particularly the ongoing effect on customer habits.

JORDAN COWEN: With the centre being shut for three and a half weeks all your usual trade, all those
people then had to find a different route to get to wherever they were going. So they can't cut
through Post Office Square, they couldn't come in, buy their newspaper you know, and do their
normal things that they're used to doing.

The problem then stems from them now going a different way - no-one get's any of that persons
continuing business. Their route has changed. As you know, humans are creatures of habit.

MATT WORDSWORTH: The Insurance Council of Australia, which represents the industry, says it's not
aware of this being a widespread problem in the recovery, but businesses make up a significant
portion of the bill facing insurance companies.

The latest figures put the cost of the disaster at $2.6 billion - almost of fifth of the claims
have been made by businesses.

ELIZABETH JACKSON: Matt Wordsworth reporting from Brisbane.