ARTICLE · 26 OCTOBER 2018

Important Decision For Anyone Involved In Coverage Disputes Or Brokers' E&O Claims

Fenchurch Law

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One of the key messages (see paras 133-134 of the judgment) is that, where an insurer declines indemnity ...

United KingdomInsurance

Jonathan Corman

Dalamd Ltd v Butterworth Spengler Commercial Ltd [2018] EWHC 2558 (Comm)

Judgement by Mr Justice Butcher was handed down on 12th October.

One of the key messages (see paras 133-134 of the judgment) is that, where an insurer declines indemnity, there is a very significant distinction between (i) the situation where the policyholder challenges the insurer's stance and goes on to reach a reasonable settlement with it; and (ii) the situation where the policyholder simply accepts the declinature and sues the broker for the uninsured loss.

In the first scenario, the policyholder can sue the broker for the difference between the amount of the settlement and what it would have recovered under policy, without having to establish in the action against the broker that the insurer's coverage defence was necessarily a good one.

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