Upheld: mis-selling of unsuitable insurance policy complaint against W.E. Bedford Insurance Services (Wimbledon) Limited

Decision detail

Summary

B and B, a limited company owning a block of flats with both tenanted and owner-occupied units, purchased block property insurance through W.E. Bedford Insurance Services. When a water escape rendered an owner-occupied flat uninhabitable in February 2025, the policy's lack of alternative accommodation cover for owner-occupiers became apparent. Bedford admitted mis-selling the unsuitable policy and offered £300 compensation. The complaint was upheld because Bedford failed to ensure the policy matched B's requirements for mixed occupancy. Although the owner-occupier (X) experienced distress, she is not an eligible complainant under FOS rules; only B can complain about the broker's sale. The ombudsman awarded £300 compensation for B's inconvenience and required Bedford to cover costs from any further insured events before March 2026 renewal arising from the policy's unsuitability.

The Ombudsman's reasoning

The ombudsman upheld the complaint on the basis that Bedford mis-sold an unsuitable policy to B. While X experienced distress as a beneficiary of the policy, she is not an eligible complainant under FOS legislation—only B, the entity to which the policy was sold, can complain about the sale. B, as a company, cannot experience distress, so £300 compensation for inconvenience is appropriate. Bedford should remain liable for any costs B incurs from insured events occurring before March 2026 renewal that result from the policy's unsuitability, as B would not have had sufficient notice to obtain alternative insurance at the March 2025 renewal.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website