MARSH LIMITED · DRN-6088972

The complaint A limited company, which I have referred to as R, complains about the sale of its commercial insurance policy by MARSH LIMITED trading as Marsh Commercial. R considers that failures by Marsh led to it not being able to fully recover losses caused by the COVID-19 pandemic. What happened The following is only a brief summary of events. Additionally, whilst various parties have been involved with the process, for the sake of simplicity, I have largely just referred to R and Marsh. R operates as a nightclub, pub, hotel and property owner. It had taken out insurance via Marsh for a number of years. This complaint concerns a policy recommended by Marsh in 2019. R had to make a claim on this policy in 2020, as a result of the COVID-19 pandemic. Ultimately, the underwriter of the policy agreed to meet the claim. However, the relevant policy term – which I will refer to as the Disease clause – limited cover to three months’ of losses and £50,000. R complained that Marsh had recommended a policy that did not provide an adequate overall financial limit for business interruption claims, and that it had recommended a policy that included such restrictive cover for claims relating to disease. Marsh said that it had recommended cover based on the financial figures provided by R. And that, at that time, the understanding was that the disease clause was intended to respond to instances of food poisoning or Legionnaires’ disease. So, a three-month limit was considered sufficient. R brought its complaint to the Financial Ombudsman Service. However, our Investigator did not recommend that it should be upheld. He was not persuaded that it had been shown that the general level of business interruption cover was inadequate. And that the documents provided to R at the time of the 2019 renewal clearly referred to the limitations regarding the Disease clause. He also did not consider Marsh had acted unreasonably by recommending a policy with such limitations. As R remains unsatisfied, its complaint has been passed to me for a decision. 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 am not upholding this complaint. I’ve explained why below. Firstly, I’ll just reiterate that the above is only a summary. Both parties have provided detailed submissions, and a number of complaint points and arguments have been raised. I have considered these, but I have not commented on each of them within this decision.

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Instead, I have focused on what I consider to be the key issues. This is not intended as a discourtesy, but rather reflects the informal nature of the Financial Ombudsman. R has referred to issues in 2017 when changes were made to the policy. My role in this complaint is to consider whether the recommendation made by Marsh in 2019 was appropriate. So, whilst I have noted the comments made, I have not referred to these further. Similarly, R has said that the overall sum insured was inadequate. However, even if this is the case, this has not had any impact on the claim. The settlement of the claim has been limited by the terms of the Disease clause. So, I consider the issues around the Disease clause to be the more relevant issue and hence this is the focus of this decision. The Business Interruption section of the policy provided cover for a maximum of 12 months’ losses. However, the cover provided by the Disease clause was limited to a maximum of three months and £50,000. This was set out in the policy schedule. And I consider that this, alongside the wording of the policy itself, would have made it clear to R that claims relating to disease would have a lower level of cover than claims for business interruption caused by, for example, property damage. The key question is whether it was appropriate for Marsh to recommend a policy to R with such a restriction on this element of cover. Due to the industry R operates in, having cover relating to disease would seem sensible. R is a public facing business, relying on a business model involving the close proximity of people. It also provides food/drink. So, it would be appropriate for an insurance broker – such as Marsh – to have recommended a policy including cover relating to disease. However, I agree with the comments of Marsh in its response to R. Prior to 2020, the expectation was that policyholders would make claims relating to disease in the event of issues such as an outbreak of Legionnaires’ disease. In the event of such an outbreak, a business would need to carry out maintenance and cleaning of its premises and water systems to get rid of the relevant bacteria. This would be unlikely to take more than three months. The Disease clause also provided cover relating to other diseases and to event such as defective sanitation or vermin/pests. However, I am not persuaded that – at the time of the 2019 renewal – it would be reasonable for an insurance broker to have been expected to anticipate a claim being made under such cover that would require an indemnity period of greater than three months. It also does not seem that R ever raised concerns about this. Taking everything into account, I consider that recommending a policy which restricted cover for business interruption claims relating to disease to three months and £50,000 was not inappropriate. Whilst, with the benefit of hindsight, this policy may not have been suitable for R’s needs, I do not consider it is fair or reasonable for Marsh to have known this at the time of the recommendation. It follows that I do not consider Marsh’s recommendation to have been unsuitable. And so I do not require Marsh to do anything further in relation to this complaint. My final decision My final decision is that I do not uphold this complaint.

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Under the rules of the Financial Ombudsman Service, I’m required to ask R to accept or reject my decision before 17 April 2026. Sam Thomas Ombudsman

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