Information flow between parties is critical

Ground Gilbey v Jardine Lloyd Thompson UK Limited [2011]

Over the past few years we have seen a number of important decisions involving the role of insurance brokers and how critical it is that there is a flow of information between the parties. This case emphasises that and the consequences when people get it wrong.

Fact

This claim relates to a fire at Camden Market and was brought by the owner of Camden Market.

A survey of the premises was carried out in 2005 and identified the use of LPG portable heating appliances. The Claimant duly banned their use but stallholders continued to use them. On the renewal of the insurance policy in 2007 the policy contained a new endorsement – a survey condition requiring completion of all risk improvements. The Claimant alleged that this condition was not brought to their attention.

On 9 February 2008 a fire broke out at Camden Market. The owners made a claim under the terms of the insurance policy. The policy condition was raised by the insurers. The owners settled their insurance claim for £3.825M which represented approximately 70% of the claim leaving a shortfall of approximately £1.7M. The Claimant sought to recover the shortfall from their insurance brokers.

Findings

The court found that the brokers had acted in breach of duty in three respects:

• A failure to find a policy allowing the use of portable heaters.
• Failure to give advice on the policy condition.
• A failure to pass on a critical email in relation to the removal of portable heaters to the owners.

The Claimant was able to recover its losses in full and the court would not entertain an allegation that there had been any contributory negligence by the owners before the fire.

Comment

This case again shows the importance of essential information being passed between insureds and insurers and that this duty extends to the parties’ agents. When difficulties emerge in the context of a claim, it is important to investigate every angle, consider the documentation and investigate as to whether all information has been communicated to the parties.

A little risk management goes a long way

We are heading for another bout of poor weather so we thought we’d pull together some tips for you to pass on to your clients to help them avoid unnecessary claims.

There is no doubt icy conditions produce more claims for slips and trips than at any other time of the year so if your clients operate from a premises they need to be vigilant to the potential risks to visitors (and employees) of being injured in icy conditions.

The Issue

Even relatively short bursts of poor weather and low temperatures can produce hazardous conditions underfoot that last for many days, and sometimes weeks after the initial event.

Most commercial buildings have some external areas that are used by employees, deliveries or the general public and building owners or tenants have an obligation under health and safety legislation to keep every pedestrian traffic route within the premises free from substances that may cause someone to slip, trip or fall.

The Solution

If a business operates from a premises they should have a plan to deal with the problem should it arise. Consideration should be given to the following when formulating your plan:

Resources
Businesses should know what manpower and equipment they are likely to have available should bad weather strike. Practically how many staff will be available (usually needed early morning) to clear areas and spread grit? Do they have sufficient equipment readily available on site, including sufficient grit and the means to transport it around the site?

Prioritise
Businesses need to decide which areas should be cleared for the premises to operate safely. Priority should be given to the building’s entrances, including goods and visitor entrances as well as staff entrances. It may be impractical to keep all car parks and areas clear so decide what needs to be done to ensure untreated areas are not used.

Maintain
Everyone in the business should be aware of their responsibilities within the plan. Make sure they have a plan to maintain the areas that have been cleared so that they do not re-freeze over.

Communicate
Employees should be informed of the bad weather plan in advance and be aware of the areas that will be prioritised for clearing so that they know what to expect when they arrive for work. Signs at the entrance to public areas should be used advising visitors of untreated areas. It should be made clear that they use untreated areas at their own risk.

Record
A premises specific risk assessment for operating the site in bad weather should be carried out and recorded.