Mr Justice Blair today handed down judgment in Eurokey Recycling Ltd v Giles Insurance Brokers Ltd  EWHC 2989 (Comm), in which Neil Calver QC and Michael Bolding acted for the defendant insurance broker. The case concerned a claim for damages for negligence and breach of contract brought by Eurokey, a waste management company, against its former insurance broker, Giles. Eurokey’s main premises in Leicestershire were destroyed by a fire in 2010. When Eurokey made a claim under its insurance policy for losses arising from the fire, the insurers threatened avoidance and negotiated a settlement with Eurokey on the basis that the latter was significantly underinsured for material damage and business interruption. Eurokey alleged that the underinsurance arose from Giles’ negligence, including Giles’ alleged failure adequately to explain how the sum insured for business interruption should have been calculated. The claim was worth over £16 million, which included the difference between the settlement sum and what Eurokey says it would have received from its insurers if it had been properly advised, in addition to consequential loss of profits.
Mr Justice Blair dismissed the claim in its entirety. He held that Giles had acted upon the instructions given by Eurokey regarding its insurance needs and that Giles had been entitled to do so because it had given a proper explanation of the basis of the insurance and had no reason to doubt the figures which had been provided to it by Eurokey. The judgment contains an interesting and significant discussion about the nature of business interruption cover and the duties of an insurance broker when arranging such cover on behalf of his client. In particular, Mr Justice Blair held that:
The judgment is here.
Neil Calver QC and Michael Bolding appeared for Giles Insurance Brokers Ltd, instructed by Plexus Law.