My small company has a lease agreement for some scaffolding equipment that was insured (at the lease compnanies requirements) when the lease was taken out. The premium was deducted along with the lease payment each month. I never recieved any paperwork for the insurance, and as a result I forgot all about the insurance although the payments were always kept up to date.

In February of this year it came to my attention that a large quantity of equipment had "dissappeared". It was taken almost certainly by an ex employee although it is very difficult to prove. Nevertheless it has gone and the exact quantity could not be determined without an inventory of the remaining equipment.

I have been winding up the company for other reasons and as a result came to realise this insurance was still in place. I have subsequently phoned L&L to ask for a claim form. I was asked for details regarding my claim and was met by a series of objections for each of my reasons. One main objection was the policy does not cover our equipment if the claim arises due to takeing an inventory. I was told that they would write to me and enclose a copy of the policy documents and schedule etc. One week later I have not heard anything.

Could anyone please tell me where I stand here? I feel that L&L are in error because they did not send me any documents to start with and I lost out on my right to cancel the policy if it was not suitable. I also feel that they are being unreasonable by not sending me a claim form and refusing the claim over the phone. Lastly, and this is my main point, it seems totaly unreasonable that they have a clause that prevents claims arising from inventories, how am I supposed to know what is missing without an inventory being taken.

Sorry for the long post. Any help much appreciated.

Thanks

Harpod

This isn't my area of expertise but from an insurers point of view I can understand why they won't take claims arising from inventories......

An insurer agrees to grant cover on the items insured and guarantees that if they are lost or damaged as a result of an insured peril (ie theft etc) that they will (after a satisfactory investigation) pay out. Because you have only discovered these losses after an inventory you cannot say how or when they were lost, it could be due to negligence, it could be a straight forward theft, it could be they were left somewhere, it could be they are out on loan and you don't remember loaning them out. In fact there could be hundreds of reasons why they are no longer with you.

So, the insurer doesn't know if the losses are because of something that they cover, but, what they do know is that you were not taking reasonable care of them (don't take that as an insult), because if you were then it would have been reasonable that you would have discovered these losses before inventory. There is also an argument that says that because of the delay in noticing the losses the chances of recovery have now been greatly reduced etc etc.

Because I don't know exactly how your business works I cannot say whether this clause is unreasonable, I don't know if they get checked in and out as they are moved from job to job etc, or if they were stolen from stock or a warehouse etc etc

Hope this has helped you at least understand the insurers case?

Mossy

Thnk you mossy for your reply.

I understnd what you are saying. I wonder if the problem comes from the definition of an inventory. My point is how do you know how much stuff is missing AFTER a theft unless you count it?

The main problem comes from not having the documents. If I had then I would have never used the expression inventory in the first place.

Do you happen to know what obligations an insurance company has regarding send out documents?

Thanks

harpod

When I read your original post, and read the word inventory, I took it to mean that you performed a stock check, ie physically went out and counted what you had. I would assume that the insurers have also assumed that.

If you are saying that you were aware a theft had occurred and then counted up what you had, then that's slightly different and needs explaining to the insurers.

An insurer is obliged to send out terms and conditions and also the insurance policy, other than that they don't have to send you anything else.

You say that 'in February it came to your attention that a large quantity of equipment had disappeared', with all due respect (and I'm neither having a go nor criticising your wording), but that does sound like the theft occurred and you were not aware of when or how it was taken, it reads like you had done a stock check (inventory) and at that point discovered the losses, as opposed to coming in to work and seeing the door smashed etc, or when collecting equipment from site noticed a shortfall.

Hope that helps, if not post back

Mossy

Thanks very much for taking the time to reply.

I was aware that we had equipment missing in Feb but I simply was unaware that we had this insurance. I know that it sounds incredible but with so many other things going on and the fact that I did not have any documents it just got over looked. In the process of winding things up I realised that we had an insurance. I phoned insurance and have found them to be VERY objectional and totaly unhelpful a complete "talk to the hand your not covered" attitude. I feel very frustrated over the whole thing.

Harpod

Further to the above problems.

About a month ago Lease and Loan wrote to me saying that they would offer a full refund of the premiums that I have paid. This was due to the fact that I was unable to identify the equipment that was stolen as being the insured equipment. I refused the refund. Unfortunatly because the company has since been wound up the Officail reciever has accepted the refund and Lease and Loan say that the insurance has been canceled and the agreement ended. The hire company are now demanding payment from me as guarantor.

I feel that L&L have acted extremely badly. However it was the hire company that arranged the insurance in the first place to cover their equipment and my deceased company paid the premium to them not L&L.

Im not really sure what action that I should take now. Any advice/comments gladly accepted

Harpod