Accelerant Insurance UK · DRN-6244388

The complaint A company, which I will refer to as “W”, complains about Accelerant Insurance UK’s handling of their buildings insurance claim. All references to Accelerant also include its appointed agents. What happened The details of the complaint are well known to both parties, so I won’t repeat them in detail here. The following is a summary of the events that led to this complaint. W made a claim for damage to a pane of glass at their premises – which cost around £5,750 to replace. Accelerant said when taking out the policy, W declared the sum insured for buildings to be £3,749, and when it attended the property, there were nine panes of glass in the property front. It said the correct value of the sum insured should have been around £25,000. Because of this Accelerant have only paid W 14.99% of the £5,750 claimed for repairs. W was unhappy with this and raised a complaint. In its final response, Accelerant maintained its decision. It said the sum insured was inadequate and an average would apply. It pointed to a section of the policy which says if at the time of the damage, the sum insured is less than the total value of the property, the consumer will bear a proportionate share of the loss. W was dissatisfied with Accelerant’s response and brought the claim to our service. Our investigator’s view Our investigator recommended the complaint be upheld. He agreed that under the relevant legalisation, W hadn’t made a fair presentation of the risk when taking out the policy. And from reviewing comments from Accelerant, he could see if it had been aware of the correct sum insured, it would have offered cover under different terms - with an additional premium of £71. However, our investigator didn’t agree the remedy offered by Accelerant was fair. He said under the relevant legislation it should have looked to settle the claim proportionately based on the premium paid. He said the fair and reasonable settlement would be based on the sum insured amount of £3,749. He also said Accelerant should pay 8% simple interest on the difference between the sum insured amount and the amount it had paid W so far. He also felt Accelerant should pay £100 for the inconvenience caused to W. Accelerant didn’t agree with our investigator’s view of the complaint and asked for an ombudsman to review the matter. It said it estimated the correct sum insured to be at least

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£25,000 and applied to the lowest amount in consideration of being fair to W. It also said if it was to apply the cost of the pane glass claimed for (£5,750) and consider that nine panes were found to be at the property, this would present a figure of around £51,750. It reiterated that the policy sets out if at the time of the damage the sum insured is less than the total value of the property, the consumer will bear a proportionate share of the loss. It said the initial settlement it offered was rejected by W, so didn’t agree it was fair to pay the interest recommended by our investigator. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I agree with the conclusions reached by the investigator for these reasons: • As a commercial customer, under the Insurance Act 2015, it’s the responsibility of the customer to make a fair presentation of the risk. So, it was for W to ensure they gave accurate information to Accelerant when it considered whether it would provide cover. This includes anything W should be aware, or reasonably aware of. • There is a vast difference between the sum insured declared by W (£3,749) and the amount Accelerant said it should be (£25,000). W is claiming £5,750 for one pane of glass alone, but nine were found when Accelerant attended the premises. So, I think it’s clear W didn’t make a fair presentation of the risk. And this doesn’t appear to be in dispute. • In summary, the relevant Act sets out what an Insurer can do in the event a consumer doesn’t make a fair presentation of the risk. A misrepresentation is a “Qualifying Misrepresentation” if Accelerant shows that without the misrepresentation, they wouldn’t have entered the contract, or would have done so, on different terms and I can see it has done so here. • Accelerant have provided comments from its underwriters that shows it would have charged an additional premium of around £71 if W had not made the misrepresentation. Meaning the total premium would have been around £3,430. • Accelerant treated the misrepresentation as careless. This is reflected in correspondence from its underwriters. Following our investigator’s view, Accelerant said there could have been suggestion, given the vast difference in the sum insured and the cost of the panes, that a reckless misrepresentation occurred. But while this has been suggested, this isn’t what it’s said, and this hasn’t formed part of the events leading to the complaint I’m considering here. • In summary, the relevant Act sets out what an Insurer can do in the event a consumer doesn’t make a fair presentation of the risk. This can include reducing proportionately the amount paid for a claim. Here Accelerant have paid a proportionate settlement based on the average of the sum insured. But the relevant Act sets out that this can be settled on the premium paid. • While I acknowledge the section of the policy highlighted by Accelerant, I don’t think relying on this, rather than following the relevant legislation, results in treating W fairly as it puts them in a worse position than they would have been in under the Act. Accelerant hasn’t made it clear in the policy documentation it has ‘contracted out’ of the relevant Act and therefore it is the remedy set out in the Act which should apply,

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• In this case Accelerant received 97% of the premium it said it would have charged if the misrepresentation hadn’t occurred. But its only offered 14.99% in settlement, by applying the proportionate settlement based on the sum insured. So, it hasn’t offered a fair amount to settle W’s claim. • However, I also need to consider the policy W took out specified the sum to be Insured as £3,749, so this is the maximum amount Accelerant will need to pay in relation to this claim. • Regarding the interest payment recommended by our investigator, this is to reflect the difference between the amount Accelerant it has offered and the amount it should have offered. As I’ve set out above, I think Accelerant should’ve settled the claim based on the sum insured amount, so it’s reasonable it pays interest on the additional amount that wasn’t reflected in its original settlement offer. • I’ve considered W’s comments about the issues caused to their cashflow due to paying for the repairs. But I’ve not seen any evidence which provides confirmation of this. I can see however it has been caused some inconvenience due to the calculation of the proportionate reduction, so I do agree with our investigator that £100 compensation is appropriate in the circumstances. So, for these reasons, I uphold this complaint. Putting things right To put things right Accelerant should: • Increase its settlement to the sum insured of £3,749. • It should pay 8% simple interest on the difference between the amount offered in its initial settlement and the sum insured amount. This should be from the date W paid for the repairs to the date it makes settlement to W. • Pay W £100 for the inconvenience caused by its actions. My final decision My final decision is that I uphold W’s complaint. To put things right I direct Accelerant Insurance UK to do as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask W to accept or reject my decision before 22 April 2026. Michael Baronti Ombudsman

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