Not upheld: breach of duty of fair presentation; policy avoidance; non-disclosure of material facts complaint against Covea Insurance Plc

Decision detail

Summary

Mr P, a sole trader operating a restaurant, held a commercial property insurance policy with Covea taken out in November 2020. When he claimed for an escape of water in March 2021, Covea voided the policy entirely, citing Mr P's failure to disclose County Court Judgments registered against him. Mr P argued he was unaware of the CCJs and believed he had a payment plan with his water board. The Ombudsman found that Mr P ought reasonably to have been aware of the CCJs, particularly given a substantial enforcement payment of over £4,000 in January 2020, and that the policy's Statement of Fact explicitly asked about CCJs 'ever awarded'. Finding a qualifying breach of the duty of fair presentation under the Insurance Act 2015, and satisfied that Covea would not have provided cover if aware of the CCJs, the Ombudsman upheld Covea's decision to avoid the policy and decline the claim.

The Ombudsman's reasoning

The Ombudsman found that Mr P ought reasonably to have been aware of the CCJs, particularly given the substantial enforcement payment of over £4,000 in January 2020, which should have prompted enquiries about formal judgments. The duty of fair presentation under the Insurance Act 2015 requires customers to disclose material circumstances they know or ought reasonably to know. The statement of fact asked about CCJs 'ever awarded' with no time limit, so even the 2015 judgment fell within scope. Covea demonstrated they would not have provided cover if aware of the CCJs, making this a qualifying breach. The Ombudsman rejected the argument that Covea should have conducted their own checks, as this would ignore Mr P's statutory duty to make fair presentation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website