Not upheld: Travel / life insurance claim disputes complaint against Allianz Global Corporate & Specialty SE

Decision detail

Summary

H, a company that provided a secured loan, claimed on its business protection insurance policy with Allianz to cover costs of defending a counterclaim filed by the borrower after judgment was set aside. Allianz initially accepted the claim but later withdrew cover, arguing the counterclaim was not genuine and the policy does not cover pursuing claims. The counterclaim consisted of only a few paragraphs with no detailed grounds or quantified damages and was ultimately struck out. The ombudsman found Allianz's decision was fair and reasonable, as the counterclaim was not properly pleaded, Allianz reasonably relied on legal advice, and the £19,000 already paid appeared reasonable for any additional costs incurred in dealing with the counterclaim.

The Ombudsman's reasoning

The ombudsman found that the policy terms clearly cover defending claims made against H but not pursuing H's own claims. The critical issue was whether a genuine counterclaim existed. The counterclaim was not properly pleaded, contained no detailed grounds or quantified damages, and was ultimately struck out. Allianz's reliance on detailed legal advice was reasonable. While dealing with the counterclaim would have incurred some costs, the evidence suggested any additional costs were limited, and the £19,000 already paid appeared reasonable. Allianz's offer to reconsider if a properly pleaded counterclaim was pursued was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website