Small Townsville businesses flooded by a burst water main are bewildered the council will not foot the bill.
Six businesses were inundated, including Cassandra Jones' barber shop, where she said she lost antiques and furniture, after black water flowed from the pipe in March.
At the time, Townsville's mayor Jenny Hill told the media, the council's insurance would "look after" affected businesses.
But this week Townsville City Council's insurer, Local Government Mutual (LGM) Queensland, has sent letters to businesses saying it does not believe their client would be found liable to pay claims following its investigations.
Ms Jones said her insurer covered about $92,500 but believed she was out of pocket by at least $250,000, including legal fees.
"The only way to describe it at the moment is gutted," Ms Jones said.
Ms Jones said she had a lawyer and was considering litigation.
'A bit ridiculous'
Carmel Gage, who owns a quilting shop, said her insurer covered most of the damage but was hoping council would pay about $20,000, mostly for the loss of trade and moving costs, which she was not insured for.
"We were out of business for 10 days … I had to pay the people who were here to help get rid of stuff, pack up," Ms Gage said.
"To me it just sounds a little bit ridiculous especially when the mayor said that the council's insurance would pay.
"I don't understand why the council isn't responsible for their own pipes."
Scott Murray, who owns an archery supply shop, said he estimated he deserved at least $15,000.
"We ended up having to move out of the place for a couple of weeks so they could renovate it," Mr Murray said.
"I don't understand how [Council] can't be held liable, I mean, it was their equipment wasn't it? If my stuff damages somebody's stuff I pay for it.
"Bloody ridiculously upset about it but what do you do?"
'Unreasonable' for council to know pipe condition
Councillor Hill said she was initially "under the impression" that council's insurance would be able to cover the businesses but has since discovered otherwise.
"We had an independent assessment done, and council was found not to be negligent," Councillor Hill said.
"So I think this will now become a battle between the insurers of the businesses with the council's insurer."
In the letter to businesses, Jardine Lloyd Thompson (JLT), which manages LGM schemes, said council acted reasonably.
"We consider that it would be unreasonable for the Council to be aware of the condition of each and every pipe within their underground infrastructure," the letter reads.
"Or to expect that Council would increase the frequency of their pipe inspections given the size of the area that they are required to maintain and the nature of the particular risk."
The letter referred to legislation as Council's defence, including the Water Supply (Safety and Reliability) Act.
That Act states service providers are not liable when water escapes from water infrastructure if it was beyond its control and they acted reasonably without negligence.
Council says it was not negligent
Council did not clarify how long it took to fix the water main but some business owners said water was flowing for hours and crews struggled to find the line.
A Council spokesman said it regretted the damage sustained but agreed with the findings of the "independent investigation" that it was not negligent.
"The water main burst around 6am … with council staff responding before 7am," the spokesman said.
"Council crews worked hard to address the immediate break when it occurred and also provided clean-up support to the affected businesses.
"Council had not received any prior indication that there was an issue with the line segment in question nor had we received any earlier complaints prior to this incident."
He said Council spent millions each year taking care of its pipeline network.
The letter asked businesses to withdraw their claim against the council or provide further reasoning about the alleged liability.
