Not upheld: misrepresentation and non-disclosure of material facts; claim decline; policy voidance complaint against Accelerant Insurance Europe SA/NV UK Branch

Decision detail

Summary

I, a limited company, complained that Accelerant Insurance Europe SA/NV UK Branch unfairly declined its business protection insurance claim and voided the policy. The insured had failed to disclose that its sole director, Mr T, was a director of another company that entered creditors voluntary liquidation four months before the policy renewed, and had a 50% interest in a third company whose other shareholder was a director of an insolvent company. The ombudsman found this constituted at least reckless misrepresentation under the Insurance Act 2015, as insolvency is a significant matter that a reasonable director would recognise as important. The underwriting evidence showed Accelerant would not have offered cover had the information been disclosed. Therefore, the ombudsman did not uphold the complaint, finding Accelerant's decision to decline the claim and void the policy was fair and reasonable.

The Ombudsman's reasoning

Under the Insurance Act 2015, the insured has a duty to make a fair presentation of the risk by disclosing every circumstance they knew or should have known about that would influence a prudent insurer's decision. The failure to disclose Mr T's recent involvement with an insolvent company constituted at least reckless misrepresentation. The underwriting evidence demonstrates that Accelerant would not have offered cover had the information been disclosed. The ombudsman found the breach was reckless rather than merely a mistake, as insolvency of a company where one is a director is a significant matter that a reasonable director would recognise as important and would not reasonably overlook. Therefore, Accelerant was entitled to void the policy without refunding premiums and was not precluded from declining the claim once the misrepresentations were discovered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website