Upheld: Travel / life insurance claim disputes complaint against HSB Engineering Insurance Limited
Financial Ombudsman decision DRN-6151825 of 2026-02-13T00:00:00+00:00. Travel / life insurance claim disputes complaint against HSB Engineering Insurance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6151825 |
|---|---|
| Decision date | 2026-02-13T00:00:00+00:00 |
| Firm | HSB Engineering Insurance Limited |
| Product | Other regulated product |
| Claim type | Travel / life insurance claim disputes |
| Outcome | Upheld |
| Remedy | HSB Engineering Insurance directed to: (1) Complete the outstanding repairs and investigations for the seven 'accepted' issues and remedy any defects identified; (2) Engage with Mr and Mrs P to clarify which Section 3.2 issues have been raised, investigated, and whether they meet the policy definition of defect; (3) Consider any evidence Mr and Mrs P provide disputing HSB's conclusions on defect definitions; (4) Offer its DRS for any issues discovered and notified within the Section 3.2 period not yet investigated, and assume liability for defects meeting Section 3.2.2 conditions; (5) Pay £1,000 compensation. |
Summary
Mr and Mrs P complained about HSB Engineering Insurance's handling of their LABC building warranty claim. HSB's DRS required the developer to complete seven defect-related actions by September 2024, but the developer failed to do so. HSB declined to assume responsibility for the outstanding actions, citing DRS process failure and alternative dispute resolution options. The ombudsman found HSB breached its non-discretionary indemnity obligation under Section 3.2 by failing to assume responsibility once the deadline passed, and that HSB's service was poor with inaccurate DRS tracker information. The complaint was upheld, requiring HSB to complete the repairs, engage with Mr and Mrs P, consider evidence disputing defect findings, offer DRS for uninvestigated issues, and pay £1,000 compensation.
The Ombudsman's reasoning
The ombudsman found that Section 3.2 of the policy creates a non-discretionary indemnity obligation for HSB to cover defects meeting the policy definition. Under Section 3.2.2 conditions (d) and (e), HSB became responsible for the seven 'accepted' issues once the developer failed to complete the required actions by the September 2024 deadline. HSB's argument that the DRS process had failed and alternative dispute resolution was available did not release HSB from its contractual liability. The ombudsman rejected HSB's reliance on the indemnity agreement with the developer as a basis for declining responsibility, noting Mr and Mrs P were not party to that agreement and HSB retained subrogation rights. The ombudsman found HSB must fairly apply policy conditions, consider evidence disputing defect findings, and offer its DRS for uninvestigated issues discovered within the Section 3.2 period. The 16-month delay, service failures, and DRS tracker inaccuracies warranted compensation.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSB Engineering Insurance Limited, all decisions | 16 | 38% |
| Travel / life insurance claim disputes, all decisions | 21,318 | 31% |
| Other regulated product, all decisions | 51,462 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website