Non Declaration of Material Facts
Will my Insurance Pay a Claim if I dont Declare a Material Fact?
123 Signs insured their Business with a broker in 2017 under a Commercial Combined Insurance. In 2018 they had a break in and a substantial amount of contents including computers were stolen. They contacted the broker to make a claim.
A loss adjuster was subsequently appointed by Insurers to assess the loss and collate the costs. Whilst the loss adjuster was undertaking his enquiries he found the client had previously been declared bankrupt in 2015 in respect of a previous company he owned.
The loss adjuster reported this back to insurers to check if the client had declared this when taking out the policy. Insurers confirmed this had not been declared. Insurers subsequently contacted the broker to make further enquiries.
It was determined that the broker had clearly asked if the client or any other directors been declared bankrupt / insolvent, had any non-motor convictions or criminal offences, been the subject of bankrupcy proceedings, had special terms imposed or renewal refused of insurance, any ccjs, iva’s or insurance cancelled, prior to the policy being taken out.
The client had answered no to all of these questions. In addition to this a statement of fact had been sent to the client stating they must declare any material facts including reiterating the original questions the broker had asked.
Insurers declined to pay the claim as it was demonstrated the client has been asked about this information when applying for the insurance, the broker had also followed up with a statement of fact which included these questions again and asking the client to contact the broker if any of the statements on the document were incorrect.
In addition, the Broker had asked the same questions again to the client when undertaking the renewal review with the client and still they had not declared the previous bankrupcy.