Column: Roger's Soapbox

Empty Promises, Broken Trust

By: | March 5, 2018

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

The facts of the matter are simple enough. Friends — I’ll call them Jack and Jill — decided to sell the small local hotel they had run for years, found a buyer and set a sale date. In the period between the agreement and completion, the couple’s liability insurance had to be renewed. Jill explained to the broker about the sale and asked that the insurance be cancelled the day after the sale.


A few days before the sale, their attached living quarters accidentally caught fire. Jack had to jump through a closed window to survive and spent time in the hospital.

With calm restored, Jill called the broker to ask how to proceed. She was advised the insurance had been cancelled, per her wishes, the day before the fire, a few days ahead of the sale. Jill explained those had never been her wishes.

The broker has not produced evidence, written or recorded, of his position.

The sale completed a month late, the fire damage having been repaired at Jack and Jill’s cost. They also footed the bill for potential profits lost during the month of repairs. They coped well, but the unilateral cancellation of the insurance coverage rankled.

My friends asked me for help with their attempts to claim. It’s been an education for all of us.

Their brokerage washed its hands of the whole affair. One cannot take action against a broker for claims denial. Jack and Jill therefore wrote to the company with whom we believed they had a policy. The letter went unanswered.

That the insurer and broker have to this day not issued a cancellation notice is surely suggestive. That the “little man” stands at a grave disadvantage is self-evident.

Later, realizing that the carrier had changed, they wrote to the correct insurance company, asking for claims forms. No reply still.

One avenue remained: In the UK, a Financial Ombudsman has been set up to resolve complaints between financial service providers and their customers.

The Ombudsman’s forms were duly completed and sent away. Jack and Jill now await a ruling. They don’t expect to win, because they see themselves as the “little people” fighting a faceless bureaucracy. If the Ombudsman rules in favor of the insurer, they would have to sue to keep their claim alive.


That Jill would have cancelled the insurance in advance of the proposed sale makes no sense.

That the insurer and broker have to this day not issued a cancellation notice is surely suggestive.

That the “little man” stands at a grave disadvantage is self-evident.

Insurers generally have a bad reputation because they insist on sticking to the contracts signed by insureds.

In this case, if the insurer has done that, so be it. If the truth is otherwise, you might read about it in your newspaper one day. Either way, a lack of communication has occurred that boggles the mind.

People’s livelihoods and economic well-being depend on knowing where they stand. Jack and Jill didn’t, and they still don’t. How can that be the right way to do things? &

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The R&I Editorial Team can be reached at [email protected]