Not upheld: claim rejection and delay in claim handling complaint against Aviva Insurance Limited

Decision detail

Summary

C, a limited company, claimed on its business interruption insurance policy following a fire in July 2023 that prevented it from completing intended work for another business (T). Aviva declined the claim, arguing C had not evidenced a loss given the business was being wound up, production equipment had been sold, and the quotation to T had expired. After reconsideration based on an accountant's report, Aviva maintained its decision but offered £150 for delay. The ombudsman found Aviva's reliance on the accountant's analysis was reasonable and C had not proven it would have completed the work with T, but agreed there was avoidable delay in the claim process and upheld the £150 compensation offer.

The Ombudsman's reasoning

The ombudsman found it reasonable for Aviva to rely on its accountant's detailed analysis showing the business was winding down, key production equipment had been sold, and C had not evidenced it could fulfill an order from T without that equipment. The expired quotation and lack of formal contract, combined with evidence that the customer T was acting for could not progress until October 2023 (by which time C appeared to have no manufacturing capacity), supported Aviva's conclusion that C had not proven a loss covered by the policy. However, the ombudsman agreed there was avoidable delay in the claim reconsideration process.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website