When handling complex liability claims, it is always important to check the policy wording and schedule.
I once handled a claim where the insured business were accused of nuisance and negligence by a neighbouring business, insofar that water was allegedly escaping from a water tank on their property, onto the neighbouring land, causing structural issues with their building. The dispute was between two commercial businesses.
Causation was very complex. Both parties had at least two expert reports (both of which had been obtain prior to notification of the matter to their insurers) and the dispute had been ongoing for some time (late notification, anyone?)
It transpired that the insured ran a metal fabrication business (which was insured under the policy) and, at some point, had moved away from their current premises, letting it out to another business as a commercial tenant. The insured were being sued in their capacity as the owner of the building (the commercial landlord) and the building was registered under a different company (a property trust).
Ultimately, it was initially believed that the issues in respect of the claim would be in respect to causation and then, subsequently, liability. The primary issue transpired to be, however, that the party being sued (the property trust that owned the property) were not insured under the policy schedule, only the metal fabrication business was.
Therefore all of the causation and liability factors paled into insignificance when faced with the fact that the business simply was not insured.
Another real-world case example that regardless of how well you know the policy wordings that you work with every day, always read the policy and schedule – the prevalent issues might not always be what you think they are going to be.
Neil Wright is Head of Complex Loss at QuestGates