Not upheld: failure to make fair presentation of risk; non-disclosure of material fact; policy voidance complaint against The New India Assurance Company Limited

Decision detail

Summary

C, a limited company, complained about New India's refusal to renew its commercial insurance policy and retroactive voidance from 2019 following a fire claim in January 2025. New India voided the policy because C's directors had failed to disclose their involvement in a company that entered liquidation in 2009 when applying for insurance in 2019. C argued the proposal form question about 'liquidation administration' was ambiguous and that voluntary liquidation was not clearly required to be disclosed. The ombudsman found the question sufficiently clear to require disclosure of any previous insolvency and that C had breached its duty of fair presentation of risk. New India was entitled to void the policy and recover the difference between claims paid (approximately £90,000) and premiums (just under £15,000), though it offered to waive this recovery if voidance was accepted. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that despite C's arguments about the ambiguity of the phrase 'liquidation administration', the proposal form question was sufficiently clear when read as a whole to require disclosure of any previous insolvency involving the directors. The question asked about any liquidation (whether compulsory or voluntary) of any previous company. C failed to disclose the 2009 liquidation, constituting a breach of the duty of fair presentation of risk under the Insurance Act 2015. New India provided reliable evidence that it would not have offered the policy if it had known of this history. As the breach was neither deliberate nor reckless, New India was entitled to void the policy and refund premiums, but could recover claims paid. The ombudsman found New India's offer to waive recovery reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website