In August, insurance broker, Saffron, are facing a 2.6 million lawsuit after failing to do the relevant financial background checks on one of their customers.
The lawsuit stems from Saffron arranging a £2.5m buildings insurance policy, and £140,000 loss of rent policy for Maurice Parker in 2013. The insurance however, became null and void when it was discovered that Parker had been the director of five companies between 1986 and 1999 which had been liquidated
The policy had specified that the insured must not have been insolvent or bankrupt.
When the time came for Maurice Parker to make a claim after a fire, it was rejected. The policies had twice been renewed but were declared void due to ‘misrepresentations and/or material non-disclosures’.
Saffron are now being sued for the full amount of the policies on the basis that they breached their duty of care. They are being accused of not doing the adequate checks as set out in the policy. This story acts as a stark reminder that non-disclosure can be harmful to both broker and the insured party.
The broker in this story, Saffron, could come away with a huge financial loss if found negligent and Maurice Parker found himself uninsured when he needed it most.
About a week ago, we wrote a blog about unrated insurers and how it’s best to avoid them. We stated that as their financial stability could not be proven, the risk in choosing to buy insurance through them was too great.
By the same merit, an insurer can only offer policies based on the information they’re given. If that information is not accurate, they have no choice but to reject any potential claim.
At NDML, we try to take a lot of that responsibility away from our customers by asking the right questions. We don’t leave things up to chance. We’ve always put a vast amount of importance on maintaining the relationship with our clients throughout the contract, so we can make sure we are on top of any changes to their business that might affect the policy.
If you want a thorough broker who you can trust, call us today.
Don’t let non-disclosure rob you of the protection you deserve.