Not upheld: General financial advice complaint against Wesleyan Financial Services Ltd

Decision detail

Summary

B, a dental practice, complained that Wesleyan Financial Services provided incorrect information about COVID-19 coverage under its business insurance policy. In March 2020, Wesleyan relayed information from the underwriter (C) that the policy would cover losses if B was forced to close by a public authority. When B later claimed for COVID-19-related losses, the underwriter declined the claim. The ombudsman found it reasonable for Wesleyan to rely on the underwriter's information and did not uphold the complaint, noting that brokers are generally entitled to depend on underwriters' coverage determinations and that the rapidly evolving COVID-19 situation in March 2020 made it reasonable to query the underwriter.

The Ombudsman's reasoning

The ombudsman found it reasonable for a broker to rely on information provided by an underwriter regarding coverage. Although Wesleyan provided incorrect information, they were entitled to rely on the underwriter's response as correct. The situation in March 2020 was rapidly evolving, COVID-19 was not a disease that existed when the policy was drafted, and the policy included provision for diseases to be added with underwriter consent, making it reasonable for Wesleyan to query the underwriter rather than assume non-coverage.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website