Partially upheld: unfair claim termination and policy cancellation; alleged misrepresentation complaint against Zurich Assurance Limited

Decision detail

Summary

Mr D claimed income protection benefit following a 2015 pancreatic tumour diagnosis that left him unable to work in his insured occupation due to unpredictable bowel symptoms. After returning to reduced-capacity work in 2022, Zurich obtained surveillance footage in December 2022 showing Mr D completing a 45-minute school run and one-and-a-half mile dog walk each morning without apparent toilet use, contradicting his reported need for toilet access 6-7 times daily for 30 minutes each. Zurich terminated his claim and cancelled his cover, alleging deliberate misleading. The ombudsman partially upheld the complaint, finding Zurich fairly ceased benefit payments based on the surveillance evidence demonstrating greater functionality, but unfairly cancelled the policy cover as Mr D's non-disclosures appeared to be oversights rather than deliberate deception. Zurich was ordered to reinstate cover and pay £200 compensation.

The Ombudsman's reasoning

The ombudsman found that while Zurich fairly terminated the claim because the surveillance footage demonstrated Mr D had greater functionality than previously reported (being away from home for three hours during his most symptomatic period without apparent toilet use), Zurich did not sufficiently prove Mr D deliberately misled it. Although Mr D underreported his dog walk duration and failed to mention the school run, he disclosed other relevant activities and remained engaged with the claim process, suggesting oversight rather than intentional deception. The policy terms require proof of deliberate misleading to cancel cover, which Zurich failed to establish. Therefore, while benefit payments could fairly cease, the policy cover itself must be reinstated.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website