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There is a trader in my town who has been selling fruit and veg from a stall on our high street. He has been there for some 25 years and is part of the character of the town. It has recently been announced that he has to move into a shop unit. This has really saddened me – the stall is part of the character of our high street and a great way to #shoplocal.
The reason? We are told it is because “pavement vending has to cease because it is now deemed as an insurance risk”.
Really? For some reason the buildings insurer is unhappy that in the common area there is a market stall. Something that has been there (without incident) for 25 years and that you commonly find in shopping centres and markets. The positive element of this story is that the trader and the building owner have reached agreement about what is needed - so we will still be able to buy from his stall albeit he needs to move away from the street.
We don’t know what the landlord’s insurer has actually said or what the issue is, but this story reminded me of numerous times I have been told I must do something because it is “required by the insurer”.
As a yoga teacher I often hear other teachers say that their insurer requires that they ensure all their students sign a declaration that the teacher is not responsible for any physical injury suffered as a result of their teaching. Well, I have actually read my policy and there is nothing in there requiring I do that and if there was then I would certainly challenge this given that (as per section 2 of the Unfair Contract Terms Act 1977) you cannot exclude liability for death and personal injury resulting from negligence.
I get the logic of reminding people that certain activities may be risky – if something causes you injury it may just be an accident and not the responsibility of the teacher or the host venue. There has to be some negligence to make a successful claim – but how would it be fair (even if it was legal) to say someone cannot claim for injury arising from someone else’s negligence?
It really frustrates me when people wrongly blame their insurer for forcing them into a certain activity and I am equally concerned that there may be some insurers who do tell policyholders to get clients to sign such an exclusion – they know it won’t stand up in court and I can only assume they hope it will dissuade any injured party from making a claim.
I recently went on a Llama walk (a Birthday present from my daughter – it was a really fun experience) and was asked to sign a form absolving the Llama farm of responsibility should I be injured. I asked why I had to sign the form and was told it was an insurance requirement. I challenged this and the story was changed – I was then told it was a local council requirement. I signed the form (I felt I had no choice) and went on the walk but this was safe in the knowledge if anything happened to me it would be deemed an unfair contract term.
Obviously, an insurer will want to encourage their policyholders to minimise the risk of a claim. For example, under a home contents policy there will be security requirements, setting out what locks should be fitted and specifying that entrance doors and accessible windows are locked whenever the property is left unoccupied.
This seems sensible.
So, my advice to policyholders is to read your policy carefully and ensure you understand what you must do to ensure the policy will pay out in the event of a claim. Generally, insurers should only ask you to do something that is proportionate and lawful and if you (as a policyholder) are not happy that is the case you need to challenge them.
However, the other side of this is that insurers must:
Make the policyholders’ duties clear – don’t bury them in a hard to find part of the policy and use plain language to describe these duties and the consequences of failure
Make the policyholder duties proportionate – for example is it reasonable to insist that all bedroom windows are secured at night? Apart for the discomfort in hot weather this would cause a delay in escaping an upstairs bedroom in the event of a fire. I know that many insurers apply this exclusion but I really feel it is one to challenge.
Ensure there is a link between the cause of a claim and any breach which is used as grounds to reject. For example, if a customer does not have the required lock on one window and burglars gained entry via a different window (that has been secured in accordance with policy terms) then it is going to be unfair to reject the claim on the grounds of the unsecured window.
So, let’s get rid of insurance requirements that are impractical or that would not be supported in law. Instead of saying “because my insurer says I must” let’s change this to “because it helps me ensure you are safer”.
Author: Sally Pearce (Conduct Matters Ltd)