“No Alarm, No Payout” Isn’t How It Works in Australia
A lot of security marketing leans on the idea that missing a security condition means an automatic denied claim. Under Australian law, that’s not accurate — and we’d rather explain it properly than use a scarier, wrong version to sell you a system.
Real Policies Do Contain Security Conditions
Genuine Australian fine-art policies, including Chubb’s, do include a security-related condition — typically a requirement to take “reasonable steps” to protect a collection, with the insurer able to refuse or reduce a claim if a failure to do so caused or contributed to the loss.
What Security Conditions Actually Look Like:
- Security conditions are real and appear in genuine Australian fine-art policy wording.
- They are not automatic. A missed condition alone doesn’t void a claim.
- Insurers must show a connection between the failure and the specific loss.
- The burden of proof sits with the insurer, not with you.
The Law Most People Get Wrong
Under section 54 of the Insurance Contracts Act 1984 (Cth), an insurer cannot simply refuse a claim because a security condition wasn’t met. It can only refuse or reduce a claim if it can show — with real evidence, not just that it might have mattered — that the specific failure actually caused or contributed to that specific loss. This has been confirmed by the High Court in cases including Ferrcom v Commercial Union, Moltoni v QBE and Maxwell v Highway Hauliers. Calling something a “warranty” in a policy doesn’t get around this test.
What Section 54 Actually Says
So Why Does Security Still Matter?
Because a fight with your insurer over causation, with your collection already damaged or gone, is not a position anyone wants to be in — even if the law is on your side. Genuine security also affects how your policy is priced in the first place, and gives you a stronger, cleaner position if you ever do need to claim.
What This Means in Practice
We Explain This Honestly
Most security companies either ignore this or overstate it. We’d rather you understood the real position.
This Isn’t Legal or Insurance Advice
This page is general information, not advice about your specific policy or circumstances — for that, talk to your broker, insurer or lawyer.
We Focus on What We Actually Control
Making sure your physical security is genuinely sorted — sensors, CCTV, alarms, access control, vaults, whatever your collection needs.
No Insurance Sales Pitch
We don’t sell, arrange or broker insurance. Ever.
Conclusion
Good security isn’t about avoiding a legal technicality — it’s about not needing to rely on one. Book a free security assessment to see where you actually stand.