Zurich loses appeal over payment for Niramax fires
The Court of Appeal dismissed an appeal by insurance company Zurich, seeking to overturn a 2020 decision ordering it to pay more than £ 500,000 to Niramax following a fire in 2015.
In March last year, as Zurich evaded payment of a £ 4.3million claim from the Hartlepool-based recycling company for damage to Eggersmann machines, it was ordered to pay more £ 500,000 for other equipment (see letsrecycle.com history).
The company appealed the decision and its case was heard by the appeals court on April 15, 2021, with verdicts being delivered on Friday April 23.
Zurich argued that the renewal premium of £ 23,714.40 for the machines in question was lower than it should have been, in part because instead of applying a rate of 6% (for risk of waste), a rate of 2.25% was used, but also because information was withheld from him.
However, this was rejected by the three judges of the Court of Appeal.
Lord Justice Popplewell ruled that Zurich erred in reaching a figure-based bonus of 2.25% and said it was this error on their part, and not a failure by Niramax, to disclose relevant material to his attitude to risk management, which was the “only one because the policy was written at a lower price than it would have been”.
Lady Justice Elisabeth Laing and Lord Justice David Richards agreed.
‘No further action’
A Zurich spokesperson said: “Zurich has defended this case in court for the benefit of as many policyholders as possible whose representations are fair and accurate. In 2020, the court ruled in favor of Zurich on the substantive point that a material non-disclosure had taken place, which led to the dismissal of the majority of the claim. We acknowledge the judgment of the Court of Appeal on the points which Zurich has pursued and will take no further action. “
“We recognize the judgment of the Court of Appeal on the points which Zurich has pursued and will not take any further action”
Niramax was asked for comment.
In summary, the dispute concerned a fire in 2015 (see letsrecycle.com story) which started in the engine compartment of a grapple and then spread to a building that contained a “brand new multi-million pound sorting machine”, which was destroyed.
The court document details that Niramax had a contract with Zurich since 2006, which was renewed at the end of each calendar year.
Although the claim was initially denied, according to the ruling document, it was ultimately granted by Zurich until the end of the insurance year, saying a representative of the company felt “indeed obligated to towards Niramax to cover at least the Eggersmann plant until the renewal of the policy ”.
The fire occurred before the renewal in December 2015. During the renewal, Zurich refused to cover the fixed Niramax plant, the ruling document says.
Shortly after the fire, Niramax claimed over the insurance policy he had with Zurich. The judge said the insurance company “had only recently and reluctantly added the Eggersmann plant to an all-risk insurance policy for contractors’ mobile facilities.”
Zurich wanted to avoid the police after this claim, the ruling document says, saying Niramax did not disclose five circumstances material to the renewal earlier in the year.
Zurich managed not to pay for Eggersmann machines, but had to reimburse for others, which was the subject of this appeal.