A consultancy has flagged to BI insurers the importance of a UK Court of Appeal ruling, which held Allianz liable to pay for material damage to business premises due to the court’s interpretation of ‘proximate cause’ in wordings, warning it is the latest in a series of pro-policyholder decisions.
The case, Brian Leighton v Allianz Insurance, concerned whether claimant Brian Leighton (Garages) Limited (BLG) was covered by his motor trade policy with Allianz for a fuel leak in 2014. The leak caused contamination of the property, requiring the business to be closed for fear of fire or explosion.
In this Insurance Insider article, Rob Smart, chief technical officer at Mactavish, explained that “For insurers and policyholders alike, the case reiterates the importance of policy wording and placing insurance right. For insurers, it means engaging with clients’ risks and resolving contradictions and ambiguities in the product they offer. The verdict favours a common-sense interpretation of a contradictory policy. In essence, the Appeal Court found that a policy for a garage can’t realistically cover damage in consequence of escape of fuel whilst also excluding damage caused by contamination. This puts the onus on the insurance market to resolve and explain how products work at the time they’re sold – which is essential to the often-overlooked concept of contract certainty.”
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