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Synergy Health (UK) Ltd v CGU Insurance (t/a Norwich Union) & Others (2010) EWHC 2583 (Comm)

Synergy was insured for material damage and business interruption for the years 2005/06, and renewed for the years 2006/07. Following an insurers’ risk assessment in 2005, Synergy confirmed by letter that work to install an intruder alarm would be completed by the end of December but it was not installed by the time of a fire in February 2007. Insurers sought to avoid the policy on the grounds of misrepresentation. The court concluded that in this case, the insured was well aware of the need to provide full disclosure of all material matters and not make any misrepresentation, and that the failure to install the alarm was caused by internal miscommunications at the insured – a comedy of errors. However, the insured were successful in their action against insurers as the insurers could not show inducement. The judge went on to deal with the claim against the brokers in the event that the claim was pursued in a higher court. He found that in the circumstances there was not an immutable requirement to give oral advice regarding the failure to warn regarding non-disclosure as this was too inflexible. Also, any such breach would not have been causative of the loss. and that with the rather than any breach of duty on the part of the broker. As such, each of the allegations of negligence against the broker failed. - [2010] EWHC 2583 (Comm)