clause which prohibited the use of heat
equipment, without certain precautions
being in place at the time – ones which
were not there. As a result, his business
had to meet the claim from the owners
of the fire damaged property, severely
affecting its ability to continue trading
afterwards. It is vital to check the terms
of the policy carefully and ensure that
the insurer’s requirements are met to
avoid this risk.
In the current economic climate insurers
are reviewing the terms of the policies in
much greater detail in attempts to try and
find reasons to avoid the policy, reducing
the extent of their payouts.
Lapsed Policy
In other cases, you may have let a
policy lapse, whether intentionally or by
mistake. Sometimes it is an oversight
to renew the policy by a certain date
but on other occasions it is a conscious
decision to try and save money by
not taking out the policy and paying a
premium in the hope that an accidents
won’t occur. For struggling small
businesses, this may seem like a gamble
worth taking but it is a false economy.
A month before dissolving his business,
a builder decided to let his employer’s
liability policy lapse to avoid having to
pay a further premium for such a brief
period of time. The odds of an accident
occurring when none had happened
in all the preceding years seemed
remote. As you can guess, typically, in
this final month, one of his employees
whilst working on a building site fell from
scaffolding breaking his leg and was
unable to work in the same capacity
for over a year. Without any insurance
cover to protect him against a substantial
personal injury claim and the related
financial losses – mainly loss of earnings
– he was faced with a significant
settlement once he paid the legal costs
on both sides.
What to do next?
If your insurer has refused indemnity
and there is no prospect of reversing this
decision, you will need to deal with the
claim being brought against you yourself.
Unfortunately, there may be strict time
limits under pre action protocols or
electronic portal systems which you
need to comply with and this is when
you need to seek legal advice. Leaving
matters to fester or missing deadlines
may well jeopardise your chances of
either defending the claim or raising
arguments to minimise any damages or
costs which you may need to pay out at
the end of the day.
At Mayo Wynne Baxter, we are able
to help you with insurance claims and
will be able to advise you whether you
may have any avenues of recourse
against your insurance company and
if not, how best to protect yourself or
your business in meeting any claim. In
some cases, there maybe an arguable
defence making the claim worth fighting
(especially if it