Background

A nationwide specialist civil engineering & building contractor with a turnover of c.£25m.

Challenge

A claim had been submitted under the client’s plant policy for damage to a hired-in welfare unit. The unit had rolled over whilst attached to one of their fleet vehicles. During the investigation, it was discovered that the vehicle towing the unit did not have the correct weight loading to tow the unit. The insurer declined the claim on the basis that the policy excluded overloading or abnormal conditions. This left the client in a position whereby they were legally liable for costs in the sum of £30,000.

Solution

Our claims team reviewed various angles to challenge the declinature and with their in-depth knowledge of insurer policy wordings and contract law, were able to argue the rule of Contra Proferentem. The Contra Proferentem principle states that if there is any doubt about the meaning or scope of an exclusion clause, the ambiguity should be resolved against the party seeking to rely on the exclusion. Our argument had been on the basis that the section within the insurer policy wording where the exclusion was being applied was ambiguous and therefore the exclusion could not be enforced.

Outcome

The result was that the insurer paid out in full, even though the event should have been excluded under the policy. Had our claims team not been involved, the client would have been left with a bill of £30,000. In addition, they would have to have declared that a claim had been declined on future renewals, which would have likely impacted certain insurers willingness to quote.

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