Heath Crawford payout underlines the perils of underinsurance for brokers
The substantial damages awarded in the recent judgment Infinity Reliance Limited (trading as My 1st Years) v Heath Crawford Limited remind insurance brokers of the perils of underinsurance, with business interruption cover being a particular pitfall. Marcus Campbell, partner at DAC Beachcroft, explains.
BackgroundInfinity Reliance Limited (Infinity) is an online retailer of personalised gifts. Heath Crawford (Heath), as its insurance broker, had advised Infinity to take out a commercial combined policy, which included BI cover (the policy).
Following a fire in 2021, Infinity had to find and fit out alternative warehouse premises. When Infinity claimed under the policy, it became apparent it was underinsured for its BI losses, because its cover was based on a forecast gross profit of £24.9m
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