Brit warehouse fire claim victory gives ‘clarity’ to insurers

Former Brit unit Brit Insurance Limited has successfully avoided liability for a warehouse fire claim following a victory in the Court of Appeal on Tuesday.

Law firm RPC, which represented the insurer, said the Court of Appeal’s ruling gives welcome guidance on the meaning of the word ‘unattended’ in commercial property policies.

Brit Insurance Limited, now known as RiverStone Insurance Limited following its sale to run-off buyer RiverStone in 2012, insured furniture hire company Milton Furniture.

Milton’s warehouse was destroyed in 2005 by a fire that broke out overnight and was started by a person or persons unknown.

The intruder alarm, which was required to be in use when the premises were left unattended, had not been set. The general manager and subcontractor were staying overnight in a house attached to the warehouse and were both asleep at the time.

The dispute was about whether two men sleeping in different parts of the premises amounted to the premises being left ‘unattended’.

A court ruling in April last year found in favour of Brit Insurance Limited, and the Court of Appeal did likewise.

RPC said the Court of Appeal ruling showed that a property may not be regarded as ‘attended’ if an individual is present in one part of a large building.

It also showed that ‘attendance’ requires a level of attention, such that the insured or its agent can observe any attempt to interfere with the property.

In addition, the case clarified that a building is ‘unattended’ if no attention is being paid to it, and ‘attended’ does not mean the same as ‘occupied’, RPC said.

RPC partner Victoria Sherratt said: “This is a welcome ruling for insurers as it provides clear guidance on how courts should interpret ‘attended’ and ‘unattended’ – terms which are fundamental to a vast number of commercial property insurance contracts.

“We always felt very strongly that ‘attendance’ required more than mere presence and are delighted that the Court of Appeal has backed that principle.”

Brit Insurance Limited was Brit’s UK-regulated insurance company. The insurer decided to sell the company as part of its restructuring and subsequently channel all of its business through its Lloyd’s unit, Syndicate 2987.