Re: Winter 2013/14 - Page 60

When insurance lets you down I once acted for a client, who’d just bought their dream house and was carrying our extensive conversion works to it, whilst living crammed into a nearby flat. An electrician came to quote for installing lights and whilst going down some darkened stairs, stepped upon a loose step, fell and broke his arm in a number of places. Unfortunately, the client hadn’t taken out any insurance to cover such an eventuality, assuming that the workmen doing the conversion works had an insurance policy which would cover this. It didn’t and as a result, just when he found himself needing the money to continue with the work, he was faced with having to pay a substantial personal injury claim, swiftly brought against him by the electrician instead. The claim settled once we were able to assess the extent of the Claimant’s injuries and financial losses and argue these down to minimise any compensation paid out but it took a couple of years. As a result, the dream house never lived up to its dream due to the reduced budget and it was always tainted by the effects of the accident. In hindsight, if he had obtained an adequate insurance policy at the start, things may have been very different. This tale is not uncommon and in the past years we have seen a growing number of businesses and individuals seeking advice regarding insurance claims where normally, they would be turning to their insurers who would deal with the claim instead. Insurance Whether you have for example, employers liability or public liability insurance attached to a business or household policy, this will tend to indemnify you in the event of a third party claim made against you. As a 58 business, this could be a claim from an employee injured during the course of his employment; or perhaps as a home owner, circumstances similar to those above. In such cases, once the incident is reported to the insurer, they will pass it to claims handlers taking the burden of litigation off your shoulders. Refusal to Indemnify Under the terms of the insurance policy, the insurer will require you to report the incident to them as soon as possible or within a certain number of days, so that they can take steps to protect themselves against the losses increasing, minimising their financial exposure. A failure to notify your insurer within time may affect this and give them the opportunity to argue that you have breached the terms of the policy, allowing them to withdraw indemnity. Suddenly you find yourself alone and “uninsured”. Other reasons which the Court’s have considered, resulting in indemnity being withdrawn and the policy being cancelled are a failure to co-operate with the insurer in investigating the claim, or making admissions of liability and settlement offers without the insurer’s agreement. In another example, a workman set fire to a property whilst using a heat gun. When the employer reported the inevitable claim against his business to his insurer, his attention was drawn to a