One failure to disclose, two denials of coverage, multiple lawsuits dealing with issues of notification, prudent uninsured and broker liability – the case of Boyd & Company v Starstone Insurance et al, is a case study in how things can go wrong in broking, underwriting and claims.
The facts in the case are fairly straightforward. In April 2017 insurance broker Boyd placed a property policy for a Scottish client. Unfortunately, in doing so, the parties failed to disclose that the client has been involved in a number of insolvencies. When the client suffered £7m of fire damage at one of its properties this failure to disclose allowed the insurer, RSA, to deny coverage.
Cue a first set of disputes, which took five years to resolve and only ended when Boyd paid out £2m to its client to settle the failure to disclose issue. Throughout this period Boyd had, in its own words, been acting as a prudent uninsured, keeping its professional indemnity insurers updated while doing its best to resolve the fire-claim on reasonable terms.
Unfortunately, this is not how Boyd’s insurers saw things. According to legal documents filed by Boyd against its PI insurers, they have denied the claim arguing that notification was not made at the right time or in the correct manner. Cue dispute number two and the legal claim that is currently going through the High Court.
So, six years on from a fire claim that could have been settled on the spot had the correct disclosures been made, multiple parties are still battling things out at court, grappling with issues of broker liability, failure to disclose, prudent uninsured and notification to name just a few.
Mactavish Claims Litigation Index
The Mactavish Claims Litigation Index aims at tracking insurance litigation and claims performance and getting the market to focus on what really matters, the product you buy with your premiums, not just the premium itself.
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