The Insurance Act and a Large Claim by Rod Smith

Rod Smith FCII FCILA, CII-Accredited Advanced Technical trainer

During this one-day course, we’ll look at a serious commercial fire and, after examining the insured’s duties under typical Claim Conditions, we’ll work through in detail what should have been included in a “fair presentation” of the risk to Insurers, including what the Insured know, what they ought to know, what they did not need to reveal, and how they may now need to evidence these earlier searches for information, how they may need to evidence identifying and asking their senior management (as defined in the Act) and other persons for whom cover is provided for underwriting information.

We’ll look at many common errors of disclosure or misrepresentation, and we’ll see what the insurers’ actual underwriters are presumed to know and not know.

If failures of “fair presentation” are identified, we’ll see how to grade, explain and apply Insurers’ four new remedies.

Then we’ll move on to review an apparent alarm failure and how both the Insurers and Insured need to be agile and well-informed in establishing the facts and carefully handling the interplay of Act Sections 10 and 11, to see whether the claim is payable or not.

Lastly, we’ll move on to review and explain some aspects of establishing quantum, such a stock-reconciliation, and the practical use of many policy clauses including Debris, Public Authorities, Designation, Contract Price, Professional Accountants and Goods in Trust. We’ll also visit the new regime of Average, and practice how to explain what the Insured can and must do, to make a successful business interruption claim. We’ll work on explaining the balance between Increased Costs and lost Turnover.

We’ll also touch on reservations of rights, the Insured’s ability to trade legally after major damage, requests for comfort letters, reserves, reinsurance, interim payment requests, possible taxation of claim money and upcoming damages for unreasonably late payment of claims. Lastly, we’ll look at a few lessons from some recent insurance litigation.

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