A North Island forestry business has been left $85,000 out of pocket after its insurer declined a Cyclone Gabrielle-related claim, in a case that turns on recovery wording, machinery access, and the requirement for written consent before action is taken.
In February 2023, Cyclone Gabrielle damaged roads, bridges, and forest areas across parts of the North Island, leaving some skid sites effectively unusable. One forestry operation had 19 heavy machines at a skid site where work could not continue because of the surrounding damage and access issues.
To keep operations moving, the business decided to relocate the machinery to a site with better access. Under the usual commercial arrangement, the client would have met the cost of shifting the equipment to the next skid site. In this instance, that arrangement did not apply, so the forestry firm sought to claim the relocation costs under its insurance policy. The claim included labour, fuel, and machine running costs, as well as accommodation and vehicle expenses for the move. The insurer declined the claim.
According to the summary released by the Financial Ombudsman Service, Financial Services Complaints Limited (FSCL), the policy provided cover for recovery expenses only when insured machinery was immobilised or inaccessible and could not be operated under its own power. The wording also required the insured to obtain the insurer’s written permission before any recovery or similar action was undertaken.
In this case, the equipment remained operational and was driven out under its own power rather than recovered as disabled plant. The business did not contact the insurer in advance, and no written authority was obtained before the costs were incurred. When the dispute was escalated, FSCL agreed with the insurer’s reading of the policy and upheld the decision to decline the claim, leaving the forestry operator responsible for about $85,000 in unrecovered costs.
Financial Ombudsman Susan Taylor said the case illustrates how decisions made quickly in a disaster environment can later be tested against strict wording and procedural requirements. “We understand that, when a cyclone hits, your priority is protecting your people and property. Natural disasters bring urgency, but skipping the paperwork can lead to denied claims. If your insurance policy has strict conditions, even well-intentioned actions might not be covered. That’s the reality, and it catches people out,” Taylor said.
FSCL is encouraging businesses and consumers to revisit their policies, clarify how terms such as “immobilised,” “inaccessible,” and “recovery” are defined, and, where practicable, notify their insurer or broker before undertaking major steps that could lead to a claim.
For insurers and intermediaries with rural and forestry portfolios, the case raises questions about how clearly recovery and relocation costs are explained at placement and renewal, and how realistic written-consent requirements are in fast-moving post-event environments.
The forestry ruling comes as FSCL reports that overall complaints about financial services remain at historically high levels. For the year ended June 30, FSCL received 1,469 complaints, up from 1,426 the previous year and about twice the volume recorded five years earlier. The scheme has not yet seen a material easing in numbers following the sharp rise in complaints two years ago in the wake of COVID-19.
While lenders still accounted for the largest share of complaints at 38%, FSCL is seeing a broader spread across sectors. “What’s changed is the spread. Complaints are now more evenly distributed across a broader range of financial services, rather than being concentrated in just a few areas like non-bank lenders,” Taylor said.
