No, THEY wanted coverage too

Another day, another broker getting sued for an omission.

This time it happens to be the largest holding company of pubs in the United Kingdom vs. the largest broker in the world.

At issue is a business interruption loss that Stonegate Group’s subsidiary companies sustained during the pandemic of 2020…but couldn’t recover because they weren’t named on the policy.

As many of us remember, 2020 was a year full of unplanned shutdowns due to COVID. By March the Prime Minister announced that pubs, bars and restaurants were to be shut down. These establishments were not permitted to reopen until July.

The linked article is worth reading, but the irony of this whole debacle is that the group HAD business interruption coverage. The one entity that was named on the policy, Stonegate Pub Company Limited, recovered through a confidential settlement with insurers. But for some reason the phrase “and its Subsidiary Companies” was left off the named insured. The parent entity had coverage. The companies that actually operated 4,500+ pubs, bars, and restaurants across the UK? Left out in the cold.

According to the pleadings filed so far, no apparent explanation has emerged as to why this critical language was omitted. What makes this even more excruciating from the insured’s perspective is that the broker’s own marketing documents showed the proposed insured as “Stonegate Pub Company Limited and its Subsidiary Companies.” The right answer was on paper. It just never made it onto the policy.

What makes this really painful for the broker: Marsh fought hard to win this account in a competitive tender in 2018. They didn’t inherit someone else’s mistake. They built their own proposal from scratch. They HAD the named insured right in their Market Taster, and then somewhere between proposal and binding, the subsidiary language disappeared. They had everything right and still got it wrong.

The details matter. Stay bindin’ and grindin’.