Not upheld: policy setup / mis-selling allegation complaint against Gallagher Insurance Brokers Limited

Decision detail

Summary

The estate of Mrs D, through its executors, complained that Gallagher Insurance Brokers Limited mis-sold a home buildings insurance policy by placing it in the name of the executors of the estate rather than the executors as individuals. The executors argued this prevented them from receiving compensation for distress and inconvenience caused by poor service from the insurer. Gallagher Limited maintained that the correct advice was given because the policyholder must have a financial interest in the property, which was owned by the estate. The ombudsman did not uphold the complaint, finding that the policy was correctly set up with the executors of the estate as the policyholder, as the estate owned the property and had the necessary insurable interest.

The Ombudsman's reasoning

The ombudsman determined that the policyholder must have an insurable interest in the property. Since the estate owned the property, it was correct that the executors of the estate were named as the policyholder rather than the executors as individuals. The ombudsman rejected the argument that the policy could have been set up differently, as this would have created problems. Additionally, the ombudsman noted that even if distress and inconvenience had been caused, the estate as a legal entity cannot suffer distress in the way a person can, so compensation would not be appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website