Policy coverage disputes

Typical problems on which solicitors and other professionals instruct us include –

• My insurers say we are not covered under their policy and are refusing to pay the claim;
• Our insurers say we did not disclose something which we should have disclosed on the proposal form;
• The firm’s insurers say that these claims are all subject to one policy limit, which won’t be enough to cover the claim;
• We have a claim which is for more than our insurance policy limit;
• Our insurers have gone bust and we’re not covered under the Financial Services Compensation Scheme;
• My former partner was dishonest, but my insurers are saying I must have known and they won’t cover me;
• Another firm’s insurers are saying that the claim is covered under our policy because we are successor practice and we don’t think we are.

We have addressed a wide range of policy coverage issues raised by insurers: the dishonesty exclusion and dishonesty consultations, late notification, breach of the duty to co-operate, and scope of cover.  We have defended several claims by insurers for reimbursement under the Minimum Terms & Conditions.

How to save over £100 million

The wording on excess layers may not follow the SRA’s Minimum Terms & Conditions, or even standard market wordings.  In one case we spotted an exclusion that potentially gave the excess layer insurers a get-out as wide as an open barn door.  The broker obtained an endorsement to close it.  The Insured has since had a claim for over £100 million.  It would have been excluded on a literal reading of the unamended wording, and the stakes were high enough that it would have been worthwhile for the insurers to have a go.