Not upheld: breach of duty of fair presentation of risk; policy voidance; non-disclosure of material fact complaint against The New India Assurance Company Limited

Decision detail

Summary

F, a limited company insured with New India since 2019, complained when New India refused to renew its policies in early 2025 and sought to void all policies from inception, claiming F had failed to disclose that its directors had been involved in a company that entered liquidation in 2009. F argued the proposal form question about 'liquidation administration' was unclear and that it had answered correctly. The ombudsman found the question was sufficiently clear when read as a whole to require disclosure of any previous insolvency, whether voluntary or compulsory. Finding F had breached its duty of fair presentation of risk and that New India would not have offered cover if it had known of the insolvency history, the ombudsman did not uphold the complaint. The ombudsman considered New India's offer to waive recovery of approximately £153,000 in net claims to be reasonable.

The Ombudsman's reasoning

The ombudsman found that despite the absence of a comma between 'liquidation' and 'administration', the question when read as a whole was sufficiently clear to require disclosure of any previous insolvency involving the directors. The question asked about any liquidation (compulsory or voluntary) of any previous company. F failed to make a fair presentation of risk by not disclosing the 2009 liquidation. This was a qualifying breach under the Insurance Act 2015, likely resulting from carelessness rather than deliberate misrepresentation. New India provided reliable evidence it would not have offered cover if it had known of the insolvency history. Under the Act, New India was entitled to void the policies and recover the difference between claims paid and premiums, though its offer to waive this recovery was reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website