Not upheld: Home insurance claim disputes complaint against Markel International Insurance Company Limited

Decision detail

Summary

F, a limited company, complained about Markel's rejection of a legal expenses insurance claim relating to a High Court breach of contract action brought by a former employee over unpaid deferred bonuses. Markel rejected the claim under a pre-policy exclusion clause, arguing the cause of the dispute arose before the August 2022 policy start date. F argued the High Court claim was separate from the earlier employment tribunal proceedings and that it only became aware of the potential claim in April 2023. The ombudsman found that the non-payment of bonuses (the cause of the High Court claim) occurred before the policy start, and that F had constructive knowledge of this potential claim in February 2022 when the former employee included it in the tribunal application. Accordingly, the ombudsman upheld Markel's rejection as fair and reasonable.

The Ombudsman's reasoning

The ombudsman found that the exclusion clause was clear and not unfair. The cause of the High Court claim (non-payment of bonuses) occurred before the policy start date, as the bonuses were alleged to be due before or at termination of employment in January 2022. Additionally, the dispute about bonus payment was inextricably linked to the dismissal. Critically, F was put on notice in February 2022 when the former employee included the bonus claim in the tribunal application, meaning F knew or should reasonably have known that legal proceedings for non-payment of bonuses would likely arise. The fact that F denied the allegations did not change this assessment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website