Insurance Claims: For accidental damage, payment isn't "inevitable"...(Cathy Hawkins)
Thursday, June 15, 2017
Nasty surprises can take their toll. Especially when you put in a claim for damage to the insurance company which is unexpectedly turned down.
The small print can offer clues. Many insurance policies, especially property, and public liability, specify that damage must be “accidental” for it to be covered. This distinguishes it from damage that happened “inevitably”. These technical differences are problematic and can lead to catastrophic results for a policyholder.
One example is the recent court decision Leeds Beckett University v Travelers Insurance, which illustrates the problem. A student accommodation block was built on ground containing water. This caused a sulphate attack on the below ground structure. The upshot of the sulphate attack was that it turned the structure to “mush”. In these circumstances the damage was the inevitable consequence and bound, eventually, to cause structural failure. The property “all risks” insurer was not liable to cover and therefore didn't under the terms of the policy have to pay up.
It’s not always easy to see whether a case falls into this problematic grey area. It takes some investigation and thinking through. Of course, in these circumstances there may be some liability on the building’s construction team. But a right to sue someone (if they have the money to pay you and the claim is not time-barred) isn’t really much comfort.