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March 28, 2006


News Update 28 March 2006

Following on our last “News Update” you might find the following of interest.

1) Ombudsman decisions (UK & Ireland)

Policyholder suffered a burglary and months later his van was broken into. He was asked to produce invoices for tools from the van and he forged these. Insurers discovered the forgery and refused indemnity and also attempted to get money back from the earlier burglary. Ombudsman held that since the forgeries did not affect the liability of the earlier claim, it should still be paid.

In another case the Insured produced three quotes which were meant to be competitive but transpired to be from the same builder. When this was discovered, she submitted the lowest quote but the Ombudsman decided if one of the original quotes had been paid insurers liability would have been higher and the fraud was material and the claim was rejected in its entirety.

Ombudsman (Irish) applied the ejusdem generis rule so that concert tickets under a Household Policy fell within the definition of “Money and Credit Cards” under the appropriate section of the Policy. Therefore the maximum limit for money applied. The tickets had been stolen with other personal belongings.

Another case involved the loss of jewellery whilst the Insured was on holiday and she claimed under the Travel Policy. However, the Insured did not comply with the Policy Condition of notifying the loss to Police within 24 hours of discovery and the Ombudsman agreed with the insurance company’s decision to exclude the loss under the terms of the Policy.

Household Policy – description of property at proposal stage – 100% torch on felt roof – unrelated case involving escape of water – Ombudsman accepted that misdescription was inadvertent. However, Insurers were no longer willing to insure the property and under the terms of the Policy were entitled to cancel the Policy.

2) Burglary Stats!!
Recent statistics suggest burglary is one of the most common business crimes, approximately one out of three companies were burgled and a further 19% were targeted for attempted burglaries. Business crime causes decreased moral and can lead to a jump in staff turnover (Source – Journal of The Chartered Institute of Loss Adjusters).

3) CAR – Important Decision!
An important case in relation to Contractors All Risks policies is the recent U.K. decision of Horbury Building Systems Limited v Hampden Insurance. A ceiling in a single auditorium collapse causing closure of the entire cinema complex. The CAR Policy covered liability for the physical consequences of the damage and economic losses flowing directly from that physical damage but did not cover the economic loss or business interruption pertaining to closure of the other auditoriums or parts of the cinema complex (For further details of the case contact me – there are also some interesting comments on alternative forms of cover).

4) Business Interruption – some interesting stats!

In a recent survey by a Zurich Insurance Company, 75% of all small businesses believe that their material damage insurance cover will also compensate it for business interruption loss. In reality many businesses do not know if they have adequate cover or not.

38% of companies either don’t back-up data or only keep data in the office.

Four out of five businesses affected by a major incident close within 2 years. Rising to 9 out of 10 for those who lose data beyond their control.

Circa 50% of companies are unaware of business continuity planning procedures amongst their suppliers or whether they have any plans.
(Source for above stats – Journal of Chartered Institute of Loss Adjusters).

It needs to be remembered that an interruption loss does not necessarily mean physical damage at the Clients premises. Credit or pre-credit insurance is an example of how cover can go further than what is normally understood, i.e. protection against a customer who goes in to liquidation and the debts owed to the Insured can be claimed under the policy.

A customer extension under an insurance Policy can cover him for losses experienced due to damage at his customer’s premises when his customers need or ability to buy goods has been affected.

(Note as Irish representatives of the Claims Expert Network, we have access to expertise in all property claims related fields – Business Interruption in particular).

5) Asbestos – beware!
Recent capacity problems for asbestos landfill sites has resulted in a significant increase in its removal and disposal cost. You should be mindful of this when reviewing sums insured on buildings with asbestos containing materials (ACMs). It is not always obvious that a building contains asbestos and detailed enquiries as to its construction etc., should be made. As you are probably aware, we carry out a “Value at Risk” service for Brokers, for buildings and machinery and please do not hesitate to contact me if you require further details. (See

6) Regulation for Loss Assessors –
Do you realise that if a Loss Assessor is representing your Client that his firm is required to be registered to undertake insurance mediation work with the Financial Regulator? Clearly, this places a greater duty of care on you and for further details see our website

Alan FitzGerald, FCII. FCILA, FUEDI, ELAE.

T: 021 4276933
F: 021 4276445
M: 086 8074553

“Property Assess is registered to undertake insurance mediation under the European Communities Regulations 2005 and is registered with the Financial Regulator accordingly”.

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