Court confirms insurance policy exclusions are not
construed narrowly/scope of an insolvency clause
The claimants brought a claim under the Third Parties (Rights
against Insurers) Act 1930 against the professional indemnity
insurers of their financial adviser. The adviser gave allegedly
negligent investment advice in respect of bonds issued by a company
which then went into liquidation (and so defaulted on payments due
to the claimants).
The insurers applied for summary judgment or strike out on two
grounds:
(1) The claim fell within the Insolvency Exclusion in the policy
issued to the adviser (and the claimants could have no better claim
than the adviser's claim under the policy). The Exclusion
excluded any claims or loss "arising out of or relating
directly or indirectly to the insolvency of the insured or of
any...business...with whom the Insured arranged directly or
indirectly any...investments".
