Upheld: Home insurance claim disputes complaint against MSIG Europe SE

Decision detail

Summary

H claimed for a vehicle stolen from outside its barbers shop under a Motor Fleet insurance policy. MSIG rejected the claim, arguing H breached a policy condition requiring reasonable precautions to safeguard the vehicle. An employee had allowed a passerby to use the toilet near an unlocked staff room containing vehicle keys, and the manager later left the vehicle outside after finding the main key missing. The ombudsman upheld H's complaint, finding that neither the employee nor manager recognised and deliberately courted a known risk, which is required to breach the condition under the Sofi v Prudential test. MSIG was ordered to deal with the claim in accordance with remaining policy terms and pay interest at 8% per annum simple from one month after the claim was made.

The Ombudsman's reasoning

The ombudsman applied the recklessness test established in Sofi v Prudential, which requires that the insured must have recognised a risk and deliberately courted it by taking measures known to be inadequate. The employee did not recognise a risk in allowing passersby to use the toilet as this was normal practice and customers had never previously accessed the staff room. The shop manager did not realise the key had been stolen (only that it was missing) and therefore did not recognise a significant risk when leaving the vehicle outside. Neither action met the threshold of recklessness required to breach the policy condition. The ombudsman also found it reasonable for a small community barbers shop to show trust by allowing people to use its toilet facilities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website