Not upheld: unsuitable advice / failure to highlight policy exclusions complaint against Shire Insurance Services Limited

Decision detail

Summary

R, a limited company, complained that Shire Insurance Services Limited failed to provide suitable business protection insurance with adequate legal cover. R claimed it had requested 'full legal cover' but the policy did not cover costs of pursuing defamation claims, which became relevant when R faced defamatory social media posts in December 2024. The ombudsman found that while Shire's assessment of R's needs was poorly documented, the recommended policy was reasonable as it covered standard commercial legal expenses areas and the exclusion of defamation claims is not unusual. The ombudsman concluded that Shire was not required to highlight this exclusion and that R would likely not have acted differently even if informed of it.

The Ombudsman's reasoning

The ombudsman found that while Shire may have failed to properly document R's demands and needs, the recommended policy was nonetheless reasonable. The policy covered the key areas normally included in commercial legal expenses policies (employment disputes, contract disputes, legal defence). The exclusion of defamation claim costs is not unusual for such policies and would not affect the purchasing decision of customers generally, so it was not required to be highlighted. Even if Shire should have mentioned this exclusion, the ombudsman was not persuaded R would have acted differently, as specialist defamation cover is rare and R had not previously expressed specific concerns about social media defamation prior to the December 2024 incident.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website