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Information flow between parties is critical
Ground Gilbey v Jardine Lloyd Thompson UK Limited [2011]
Over the past few years we have seen a number of important decisions involving the role of insurance brokers and how critical it is that there is a flow of information between the parties. This case emphasises that and the consequences when people get it wrong.
Fact
This claim relates to a fire at Camden Market and was brought by the owner of Camden Market.
A survey of the premises was carried out in 2005 and identified the use of LPG portable heating appliances. The Claimant duly banned their use but stallholders continued to use them. On the renewal of the insurance policy in 2007 the policy contained a new endorsement – a survey condition requiring completion of all risk improvements. The Claimant alleged that this condition was not brought to their attention.
On 9 February 2008 a fire broke out at Camden Market. The owners made a claim under the terms of the insurance policy. The policy condition was raised by the insurers. The owners settled their insurance claim for £3.825M which represented approximately 70% of the claim leaving a shortfall of approximately £1.7M. The Claimant sought to recover the shortfall from their insurance brokers.
Findings
The court found that the brokers had acted in breach of duty in three respects:
- A failure to find a policy allowing the use of portable heaters.
- Failure to give advice on the policy condition.
- A failure to pass on a critical email in relation to the removal of portable heaters to the owners.
The Claimant was able to recover its losses in full and the court would not entertain an allegation that there had been any contributory negligence by the owners before the fire.
Comment
This case again shows the importance of essential information being passed between insureds and insurers and that this duty extends to the parties’ agents. When difficulties emerge in the context of a claim, it is important to investigate every angle, consider the documentation and investigate as to whether all information has been communicated to the parties.
