QBE wrong to deny coverage to Sublime victims, ACT government says

Al Locus and Emma Snowden with their children (from left) William, 7, Kenji, 4, and Nathaniel, 23 months, at their Kaleen home.

Insurance giant QBE has been blasted by senior officers of the ACT's Environment and Planning Department for failing to compensate victims of the $4.5 million Sublime Constructions and Development collapse.

QBE is refusing to pay out on home warranty insurance certificates issued to up to 13 Sublime clients who have been left about $1.1 million out of pocket after the builder went into administration and then liquidation earlier this year.

Department construction services director Craig Simmons likened QBE's behaviour to that of some insurance operators in the workers compensation sector, and said the apparent attempt to evade liability on a technicality was doomed to fail.

"We [the department] think this is pretty straightforward," he said. "It is a pretty simple policy."

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Aler Locus and his partner Emma Watson, whose extended family of six have been squeezed into a cramped Kaleen bungalow for more than a year as a result of the Sublime debacle, agree.

Mr Locus said QBE was trying to make his, and the other affected families, bear the cost of its failure to carry out proper due diligence when it issued the policies.

Home Warranty Insurance is a statutory obligation in all jurisdictions. In the ACT, builders cannot sign a valid contract until the client has been provided with a certificate showing the insurance is in place.

QBE, whose total exposure to the Sublime collapse is estimated to be $1.1 million with individual claims capped at $84,500, has told affected owners that because the certificates were made out in the name of Sublime Builders Pty Ltd, not Sublime Constructions and Development, they were not covered.

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QBE wrong to deny coverage to Sublime victims, ACT government says