Not upheld: claim limitation and scope of cover complaint against China Taiping Insurance (UK) Co Ltd

Decision detail

Summary

B, a limited company, claimed on its business interruption insurance after a storm in October 2023 caused water ingress and damage to its premises. China Taiping accepted cover for interruption caused by the storm but limited payment to six weeks, arguing that black mould found in the roof space was pre-existing and that subsequent landlord repairs were not covered. B disputed this, arguing the mould was storm-caused and that it could not reasonably return to trade until all issues were resolved. The ombudsman upheld China Taiping's position, finding the expert report, photographs, and B's own early reporting of significant mould indicated pre-existing conditions not caused by the storm, and therefore not covered under the policy's definition of an insured incident.

The Ombudsman's reasoning

The ombudsman found that while the expert report was based on professional judgment and supported by photographs showing extensive pre-existing mould, the fact that B itself reported significant black mould shortly after the water ingress indicated the mould predated the storm. The policy covers business interruption resulting from insured damage (storm-caused water ingress) but not from pre-existing defects or landlord failures to maintain the property. Although B could not reasonably return until all issues were resolved, the subsequent mould removal and landlord repairs were not covered as they did not result from the insured incident. The delay in final settlement was justified by the need for supporting documentation, and interim payments were made.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website