Not upheld: claim declined - scope of cover complaint against AmTrust Specialty Limited

Decision detail

Summary

Mr B and Mr M complained that AmTrust unfairly declined a claim on their legal expenses insurance policy relating to a breach of contract concerning shares purchased during Mr B's employment. AmTrust initially assessed the claim under the employment disputes section, then reconsidered it under the contract disputes section, which covers disputes about contracts for 'goods or services'. AmTrust declined cover on the basis that shares do not fall within this definition. The ombudsman upheld AmTrust's decision, finding that shares are intangible assets that do not reasonably fall within the definition of 'goods or services', and that there was no sufficient ambiguity in the policy to support an alternative interpretation. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman considered whether shares fall within the ordinary and normal meaning of 'goods or services'. Goods were defined as tangible assets that can be possessed and used, while shares are intangible and can only be owned as signifying part ownership of a business. The ombudsman rejected the comparison to digital goods, noting that digital media has a physical equivalent whereas shares do not. The ombudsman concluded there was no sufficient ambiguity in the policy definition to interpret shares as falling within the scope of cover.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website