Taking Out Insurance - Have You Disclosed Everything You Should

Taking Out Insurance? Have You Disclosed Everything You Should?

Insurance companies have an expectation that their customers will tell them everything they need to know, so they can fully assess the insurance risk they are taking. In the following case, a man who insured his company did not tell the insurers of his criminal past and when he needed to make a claim following a fire it was refused.

The man had previous convictions for a variety of offences including assault, for which he had served two prison sentences. The fire destroyed all the company’s stock and was disastrous. However the insurer had no knowledge of the man’s criminal history.

The refusal to pay the insurance claim following the fire is standard practice, if the insurers find that they did not have all the information they needed prior, to agreeing to take on the customer. The company sought a resolution through the courts against the broker who had arranged the company’s combined commercial insurance. The businessman and his wife claimed that they had informed the broker of the previous convictions and it was they who had failed to disclose the facts to the insurance company.

The court dismissed the company’s claim against the broker as they had no knowledge of the man’s criminal convictions so could not have failed to disclose them. The brokers had advised the man and his wife of the need for full disclosure, and their arguments that this was not the case were regarded as untruthful. and the court did not believe the evidence they gave as the truth.