Partially upheld: claim rejection based on policy breach; unreasonable delay in claims handling complaint against Markel International Insurance Company Limited

Decision detail

Summary

T, a limited company holding a sponsorship licence, received a suspension notice from the Home Office in October 2024. T contacted Markel's legal advice line but was directed to confirm cover with Markel's claims team before proceeding. T instead instructed a solicitor urgently without obtaining Markel's consent and submitted a claim for over £30,000 in legal costs in January 2025. Markel rejected the claim, initially on the incorrect basis that sponsorship licences were not statutory, but ultimately on the grounds that T had breached policy conditions by incurring costs without consent and submitting the claim late. The ombudsman found the rejection fair as Markel was prejudiced by late notification, but awarded £150 compensation for Markel's unreasonable six-month delay in responding to the claim.

The Ombudsman's reasoning

The ombudsman found that T was not effectively turned away by the helpline but was directed to contact Markel's claims team to confirm cover. The delay in submitting the claim was not caused by Markel's actions. Although T breached the policy condition by incurring costs without written consent and submitting the claim late, the ombudsman considered whether it was fair for Markel to rely on this breach. The ombudsman found Markel was prejudiced by not having the opportunity to obtain its own legal opinion, confirm compliance with other terms, or set reasonable fees at the time the matter arose. The ombudsman noted that legal expenses insurers routinely handle urgent claims and Markel would have had 20 days to make a decision. However, the ombudsman upheld a separate complaint about unreasonable delay in Markel's response to the claim (six months), which caused inconvenience to T.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website