A company that lost thousands of pounds worth of stock in an arson attack has won its claim of professional negligence against its insurance brokers.
The court heard that the company used a former church to store amusement arcade machines and to carry out maintenance work on them.
An insurance policy covering the premises and the machines had been obtained from an insurer for the period from July 2008 to July 2009. In December 2008 there was a fire at the premises resulting from an arson attack.
The company made a claim on the policy, but the insurer declined the claim on grounds that the premises did not comply with the minimum security standards (MSS), which was a condition of cover. The MSS required external doors to have mortice locks and hinge bolts, and windows to have locks or steel bars.
The insurer also claimed that the company had not taken reasonable steps to prevent the loss from occurring.
The brokers accepted that the company had not been informed that the MSS were a condition of the policy but argued it would not have made improvements to the property even if it had been informed.
The court found in favour of the company. There was no real evidence that it would not have carried out the necessary work to comply with the MSS if it had been informed that it was a condition of cover. The expense involved was modest compared with the cost of the insurance.
The company was therefore entitled to receive £360,000 compensation in relation to the damaged machines, plus interest and costs.
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