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Robbery Victim Caught Out by Insurance Fine Print

shopsIn a ringing warning to the business community that the greatest care is needed in reading the small print of insurance contracts, insurers refused to indemnify the owners of a jewellery store for losses suffered in a robbery on the basis that an ‘onerous’ policy condition had not been complied with.

The owners had put in a substantial claim under their policy following the raid but were met with arguments that they had failed to keep detailed stock records as required by the condition. The dispute was placed before an arbitrator, who found in the insurance company’s favour, with the result that the policy was not worth the paper it was written on so far as the owners were concerned.

The owners’ bid to overturn the arbitrator’s decision was subsequently dismissed by a judge, but that did not deter them from launching fresh claims against the insurers and brokers who had arranged the cover. It was submitted, amongst other things, that the owners had fallen victim to professional negligence and misrepresentation.

Noting that the insurers had estimated their bills for legal costs to date at more than £185,000, the court struck out all but one of the owners’ claims on the basis that it would be an abuse of court process, as well as ‘oppressive and unfair ‘,  to allow re-litigation of issues that had already been ruled upon by the arbitrator.

The one claim that was permitted to proceed to trial was that the brokers, who had not been parties to the arbitration, had been negligent in failing to draw the condition to the owners’ specific attention or to advise them of its potential effect. The owners’ claims against an individual broker and the insurers were struck out in their entirety.

For advice on the legal implications of your insurance arrangements, contact us.