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Case Review: Insurance
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose.
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FMB/GI 0475 - Ambiguity in Policy Exclusion (Goods-In-Transit)
A lorry carrying the insured goods (steel sheets) was involved in an accident. The steel sheets were scratched, dented and bent to varying degrees as a result of the accident. The insurers declined the insured's claim for the damages to the steel sheets on the ground of the following policy exclusion:-
"This policy excludes the risk of rusting, denting, staining, chipping, scratching, water damage, oxidation, discoloration, material damage, loss of damage, mechanical, electrical & electronic derangement"
As reported by the adjuster the damage to the steel sheets was due to the impact of the accident. It is not clear whether the policy intends to exclude scratching and denting caused by an accident. The exclusion clause could be interpreted as being limited to scratches, dents cracking etc which resulted in the usual course of the journey. If the policy intends to exclude the risk of denting, scratching, cracking etc irrespective of the cause it should be expressly stated in the exclusion clause. The Mediator found that there was an ambiguity in the policy exclusion clause.
Upon being queried the insurers revised their decision and approved the claim.
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