Not upheld: claim rejection - insufficient evidence of insured peril complaint against Intact Insurance UK Limited

Decision detail

Summary

S, a beauty business, claimed on its business protection insurance policy with Intact Insurance UK Limited after a treatment machine stopped working in November 2025. After a repair firm reconnected a loose power connector in February 2026, the machine subsequently failed again with a burning smell indicating electrical fault. Intact declined the claim, arguing the damage resulted from mechanical or electrical breakdown which was excluded from the policy. Mrs K contended the failure was caused by sudden water leakage during use, which would be covered. The ombudsman found insufficient evidence to prove the subsequent failure resulted from water damage rather than the identified electrical fault, and upheld Intact's decision to decline the claim, though Intact agreed to reconsider if S provided expert evidence of an insured peril.

The Ombudsman's reasoning

The ombudsman found that while the policy covers damage from 'any accidental cause', it contains exclusions for mechanical and electrical breakdown. The expert evidence showed a loose power connector (mechanical breakdown) and subsequent electrical fault, both excluded from cover. Although Mrs K claimed water leakage caused the damage, which would be covered under the escape of water contingency, there was insufficient evidence to prove the subsequent machine failure resulted from that water damage rather than the identified electrical fault. The burden was on S to demonstrate an insured peril had occurred, which it failed to do with clear evidence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website