Not upheld: policy avoidance for breach of duty of fair presentation; claim denial complaint against UK Insurance Limited

Decision detail

Summary

W, a company operating a bed and breakfast, complained that UKI unfairly avoided its commercial property insurance policy and declined a claim following building damage and fire. W had agreed that the premises would always be occupied overnight by its representative when guests were staying. UKI's agent visited the property post-claim and reported it was not staffed overnight, a finding corroborated by online reviews. UKI avoided the policy under the Insurance Act 2015, finding W had made a reckless misrepresentation regarding overnight staffing. The ombudsman upheld UKI's decision, finding the firm had reasonably relied on its agent's observations and supporting evidence, and that W had breached its duty of fair presentation.

The Ombudsman's reasoning

The ombudsman found that W had a duty to make a fair presentation to UKI as this was a commercial policy. UKI reasonably relied on its agent's visit report, which indicated the premises were not manned overnight, and corroborated this with online reviews showing staff were not present. The ombudsman rejected W's arguments about ambiguity in the policy questions, the informality of the agent's visit, and misinterpretation of how a guesthouse operates. The ombudsman concluded that the balance of evidence suggested W was not staffing the premises overnight despite agreeing to this statement, constituting a reckless breach of the duty of fair presentation under the Insurance Act 2015, which entitled UKI to avoid the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website