Recently, we have been working on a matter for a new client. Our client is a tenant who had signed a Lease requiring the tenant to arrange the insurance for the Lease, but the landlords arranged it instead. The landlord and the broker failed to list our client on the policy, despite the broker being advised of the businesses.
The building burnt down a couple of years ago and the insurance company paid for the cost of repairs.
Over a year later, the insurer sent our client a claim seeking $400k on the basis that our client was not insured and was at fault for the fire.
I’ve now drafted a reply with 2 defences:
(a) Firstly, our client was not at fault. The fire was truly an accident and no one was to blame.
(b) Secondly, even if our client was to blame, the landlords, one of the directors, and the broker company and its director, were all negligent in failing to ensure our client was listed on the insurance policy, so our client has a defence against a claim by the landlord, and the claim by the insurer has to be made through the landlord.
The insurance company may now sue the broker, but what damage did it suffer as a result of the brokers’ negligence? Possibly none, but insurance companies are good at blaming others.
If you found this article helpful, please consider providing a Google Review and/or like us on LinkedIn. For help and advice with insurance claims, see Michael Paterson & Associates (08) 9443 5383 | www.patersons.com.au
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