Upheld: unfair claim decline complaint against Hiscox Insurance Company Limited

Decision detail

Summary

H, a micro-enterprise formed in September 2023, made a claim on its business protection insurance policy for items stolen from Mr S's car boot in November 2024. Hiscox declined the claim, arguing the items were personal belongings of Mr S rather than business assets. The ombudsman found that while the items were originally purchased by Mr S, they had been brought into the business when H was set up and pooled for business use, with H paying for their replacement. The ombudsman upheld the complaint, finding that Hiscox applied too strict an interpretation of the policy terms by emphasizing original ownership rather than considering the items' use in business operations and H's legal responsibility for them. Hiscox was directed to settle the claim for all items except the glasses and pen, plus interest.

The Ombudsman's reasoning

The ombudsman applied the policy definition requiring items to be 'used in connection with H's activities' and either 'belong to H or for which H is legally responsible'. The ombudsman found that original purchase and ownership should not be the sole measure, particularly for a new start-up where directors bring items into the business. The signed statement from Mr S, accepted as reasonable by the loss adjusters, provided direct evidence that the items were used for business operations and had become H's responsibility. Hiscox applied too strict an interpretation of the policy terms without fairly considering the circumstances of the business start-up and the evidence provided.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website