Hamsard One Thousand and Forty-Three Limited v AE Insurance Brokers Limited
[2024] EWHC 262 (Comm)
George on High Limited & Anor v Alan Boswell Insurance Brokers Limited & Anor
27 July 2023
[2023] EWHC 1963 (Comm)
High Court
A hotel burned down. The insurance company said only the building owner was covered, not the business running the hotel, even though the business paid the insurance. The judge said the insurance company knew the business was covered all along because they handled prior claims for the business, so they have to pay for the damage to the business. The insurance broker also has to pay for the money lost in rent because they didn't properly insure the business.
Key Facts
- •The George, a 16th-century hotel in Rye, Sussex, was largely destroyed by fire in July 2019.
- •First Claimant (GOH) owned the freehold, Second Claimant (GOR) operated the hotel business.
- •Insurance policy (Policy) named "George on High Ltd t/a The George in Rye" as the insured.
- •NIAC (Second Defendant) denied liability to GOR for business interruption, stock, and contents losses.
- •Broker (First Defendant) arranged the insurance and was sued by Claimants for failing to adequately insure GOR.
- •Multiple claims were made against the hotel prior to the fire, involving both GOH and GOR, and handled by NIAC's claims handlers.
- •Premiums were paid by GOR for the insurance.
- •The main dispute was between the Broker and NIAC regarding liability for GOR's losses.
Legal Principles
Contractual interpretation involves considering the entire contract, commercial common sense, and surrounding circumstances.
Chartbrook Ltd v Persimmon [2009] UKHL 38; Pink Floyd v EMI [2010] EWCA Civ 1429; Wood v Capita Insurance Services Ltd
Knowledge of an insurer's agents, acting within their delegated duties, can be imputed to the insurer.
Evans v Employers Mutual [1936] 1 KB 505; Mahli v Abbey Life Insurance [1995] 4 Re LR 305; Mark Nicholas Kennedy Aldridge & others v Liberty Mutual Assurance Insurance Europe Limited [2016] EWHC 3037
Rectification of a contract requires a common continuing intention, an outward expression of accord, continued intention at execution, and a mistake in the instrument.
Chartbrook; Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71; Cherry Tree v Landmain [2013] Ch 305
Estoppel by convention requires a common assumption, reliance, and detriment.
Benchdollar [2009] EWHC 1310 (Ch); Dixon v Blindley Heath [2016] 4 All ER 490; Tinkler [2021] UKSC 39
A principal is generally imputed with knowledge relating to the subject matter of the agency which an agent acquired while acting for the principal.
Bowstead & Reynolds on Agency
Insurance Act 2015 sets out duties of fair presentation and considerations of insurer's knowledge.
Insurance Act 2015
Outcomes
NIAC is liable to indemnify GOR for business interruption, stock, and contents losses.
The court found that the policy, considering all relevant background knowledge and circumstances, covered GOR's business, despite the imprecise wording of the insured party.
The Broker is liable to GOH for £776,000 for uninsured loss of rental income.
The court determined that no rent was payable from GOR to GOH during the period the hotel was closed due to the fire, and the existing insurance did not cover this loss.