Not upheld: claim settlement dispute and handling delays complaint against AmTrust Specialty Limited

Decision detail

Summary

V, a limited company, claimed on its commercial landlord insurance policy with AmTrust for water damage to a rental property bathroom. AmTrust's loss adjusters concluded the damage resulted from gradual water ingress due to failed sealant around the bath, while V's plumber identified a collapsed bath trap as the cause. AmTrust initially declined the claim but later offered 50% settlement and £700 compensation for handling delays. The ombudsman upheld AmTrust's position, finding that contemporaneous evidence from February 2024 and photographs showing widespread deterioration supported the gradual water ingress conclusion, making the 50% settlement fair and the £700 compensation appropriate for business-level impact.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test to determine whether damage was caused by a one-off insured event or developed over time. While accepting the bath trap had failed and contributed to damage, the contemporaneous evidence from February 2024 showing the seal was already damaged, combined with photographs showing widespread deterioration across multiple areas rather than localized damage, supported AmTrust's conclusion that water ingress occurred gradually over time. This pattern of damage was more consistent with water escaping down the side of the bath than the bath trap failing alone. The 50% settlement represented a pragmatic compromise given the competing explanations. For the handling issues, the ombudsman noted that as V is a limited company, compensation reflects business-level impact rather than personal distress, and £700 was proportionate to the delays and poor handling experienced.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website