- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 29 Jun 2017
Misrepresentation and insurance
When taking out an insurance policy, it might seem tempting to minimise the risk insured against with a view to reducing the premium. However, a recent High Court case concerning a catastrophic property fire showed why absolute frankness is required.
Its owners claimed a seven-figure sum from their insurers, but the latter refused to pay on the basis that various features of the property had been misrepresented to them.
When applying for the insurance, the owners had described the property as in good repair. However, the Court noted evidence that, among other things, many of its windows were broken or falling out and that its roof leaked.
The owners’ assertions that the property did not have a flat roof and had not been subject to malicious acts of vandalism were also substantially incorrect.
In refusing to order the insurers to indemnify the owners for their loss, the Court noted that the latter had made no real effort to fairly represent the risk. Had they done so, the insurers would probably have declined cover.
In the circumstances, the insurers were entitled to avoid the policy and tender the return of the premium.
 Related articles on Designing Buildings Wiki
- Caveat emptor in property sales.
- Directors and officers insurance.
- Employer's liability insurance.
- Excepted risk.
- Failure to mention asbestos.
- Failure to notify tenant.
- Legal indemnity insurance.
- Material non-disclosure.
- Non-negligent liability insurance.
- Property disrepair and landlord liabilities.
- Specified perils.
Featured articles and news
A document can be called a bond or a guarantee. Does the name matter and what is the difference between them?
New briefing note is launched focusing on increasing knowledge of housing that promotes health and wellbeing.
Arbitration is a private, contractual form of dispute resolution used in the construction industry.
The European Parliament has approved a revised Energy Performance of Buildings directive.
One in six MPs supports the ring-fencing of retentions as proposed in the 'Aldous Bill'.
A stakeholder is anyone who has an interest in the process or outcome of a construction project.
BRE launches online self-assessment tool for ethical labour sourcing.
Tower refurbishment failed to meet safety standards on several counts, according to leaked report.
It may seem obvious but what does the term 'structure' refer to within a built environment context?
Carillion's liabilities could be much higher than previously thought, according to Receiver.
Photographing Historic Buildings, by the former head of photography at English Heritage.