Not upheld: Service failures generally complaint against E (limited company)

Decision detail

Summary

E, a limited company, claimed under its commercial property insurance policy for storm damage to warehouse stock in September 2024. The underwriters refused the claim, appointing loss adjusters and a surveyor who found the warehouse roof in poor condition with long-standing water ingress, evidenced by makeshift water collection systems that predated E's November 2023 tenancy. E had stated in its application that the buildings were in good repair. The ombudsman found E breached its duty of fair presentation of risk under the Insurance Act 2015 by failing to disclose the roof's poor condition, which it knew or ought to have known. As the underwriters would not have offered storm and flood cover on the same terms had they known the true condition, they were entitled under the Act to treat the contract as if such cover had been excluded, justifying the claim refusal. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that E failed to make a fair presentation of risk under the Insurance Act 2015 by incorrectly stating the property was in good repair when the roof had long-standing water ingress issues evidenced by makeshift water collection systems that predated E's tenancy. The reports and photographs clearly demonstrated the roof was not in good repair at the time of application, and this was information E knew or ought to have known. The underwriters provided reliable evidence they would not have offered cover for storm and flood on the same terms had they known the true condition. As this constituted a qualifying breach, the underwriters were entitled under Schedule 1 of the Insurance Act 2015 to treat the contract as if it had been entered into with storm and flood cover excluded, thereby justifying the claim refusal.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website