{"id":1966,"date":"2023-10-03T11:39:16","date_gmt":"2023-10-03T11:39:16","guid":{"rendered":"https:\/\/elbornes.com\/?post_type=insight&p=1966"},"modified":"2023-10-03T11:54:16","modified_gmt":"2023-10-03T11:54:16","slug":"know-your-client-the-problems-of-failing-to-identify-exactly-who-you-act-for","status":"publish","type":"insight","link":"https:\/\/elbornes.com\/insight\/know-your-client-the-problems-of-failing-to-identify-exactly-who-you-act-for\/","title":{"rendered":"Know Your Client! \u2013 The problems of failing to identify exactly who you act for"},"content":{"rendered":"

The recent brokers\u2019 negligence case George on High Ltd v Alan Boswell Insurance Brokers Ltd <\/em>(High Court, 2023) is a cautionary tale why brokers must always properly consider who \u2018the insured\u2019 is and convey that accurately to insurers.<\/p>\n

The case involved a dispute about an insurance policy taken out for The George, a 16th-century hotel in Rye, Sussex. George on High Limited (GOH) owned the freehold, and George on Rye Limited (GOR) was responsible for operating the hotel. GOR paid rent to GOH for using the premises for the hotel business. Both companies were under the common ownership of Mr and Mrs Clarke.<\/p>\n

The Defendant insurance broker arranged the insurance cover over multiple years. From 2013 onwards the insurer was New India Assurance Company (NIAC). A policy was in effect for the period from 18 November 2018 to 17 November 2019, naming “The George on High Ltd t\/a The George in Rye<\/em>” as the insured \u2013 in other words, it contains no express reference to GOR. However, it was common ground that, by November 2018, NIAC was aware that GOR existed and that GOR operated the business of the hotel.<\/p>\n

A fire largely destroyed the hotel on 20 July 2019, leading the Claimants to seek indemnification from NIAC for losses caused by the fire. NIAC accepted liability for damage to the hotel owned by GOH but declined payment for business interruption and other items related to GOR (the “Insurance Claims”), reasoning that GOR was not an insured party under the policy.<\/p>\n

GOR claimed against the broker alleging that it had negligently failed to obtain insurance for GOR. In turn, the broker asserted that NIAC was responsible for paying the Insurance Claims and NIAC was added as a second defendant.<\/p>\n

Unusually, the broker accepted that it was liable to the Claimants for the Insurance Claims to the extent NIAC was not liable. In other words, there was no question that the Claimants would be successful on liability, the dispute was solely between the broker and NIAC as to who was liable to pay for the Insurance Claims.<\/p>\n

Judgment<\/strong><\/p>\n

The Court considered three main arguments presented by the broker:<\/p>\n