We use cookies to improve this site and enable full functionality. You can change your cookie settings at any time using your browser. Our cookie policy.

Brokerage sued over claims it didn’t provide enough coverage

Brokerage sued over claims it didn’t provide enough coverage

Brokerage sued over claims it didn’t provide enough coverage A bakery in Ireland has accused an insurance broker of negligence after it was found to be underinsured by €1.15 million after a fire burned down its factory.
 
The Flat Bread Company Ltd, based in Clara, County Offaly, was struck by fire in January 2015. The business was forced to relocate to Tullamore while rebuilding was in progress. It now claims that even after the tragic incident it still plans to continue expanding its business.
 
Flat Bread Company accused broker First Ireland Risk Management of negligence by selling the wrong insurance policy – one that did not provide the appropriate level of business interruption cover.
 
Justice Brian McGovern entered the case to the Commercial Court list after First Ireland refused to object, saying it would be fully defending the claim.
 
Kieran Walsh, the bakery’s managing director, stated in an affidavit that First Ireland recommended a “commercial select food and drinks manufacturers” policy, from Travelers Insurance Company.
 
Walsh alleged that the broker failed to consider that his firm was expanding, and that the policy should’ve allowed an automatic increase of up to 33 per cent of the base sum insured.
 
After the fire devastated the factory, Travelers Insurance paid out €1.72 million, but it was not enough to pay for all the damages. Flat Bread Company still suffered a loss of €1.15 million, according to Walsh.
 

RELATED LINKS:
Your clients need BI cover – and here’s why…
Many brokers vulnerable after buying cheap PI cover
Ironshore product recall cover targets food, beverage companies