Indecent electronic proposals

The Court of Appeal has again emphasised - in the recent case of Whitlam v. Hazel - the importance of brokers making sure that questions in proposal forms are answered accurately and completely.

The claimant, Mr Whitlam, applied for motor insurance. He was working full-time at a sports shop connected with a golf course. He had applied to train as a golf professional and played in amateur tournaments in his own time.

He gave his broker a hand-written proposal form, in which he described his occupation as "shop assistant, retail" and gave his employer and business address as "Neil Burke - Horsham Golf + Fitness, Worthing Road".

The broker produced a printed form, which Whitlam signed. An electronic version of the form was then entered into a computer using ABI software to obtain a quotation. The form described Whitlam's occupation as "shop assistant, retailing", but merely gave the employer and business address as "Worthing Road, Horsham".

The broker omitted the reference to golf. The court said this was "most unfortunate".

Whitlam suffered a serious car accident when returning from a residential golf-training course that had been held at the Professional Golf Association's premises.

The Court of Appeal decided that Whitlam's motor insurers, KGM Motor Policies at Lloyd's, were entitled to avoid his policy because he had provided an incomplete and misleading answer to the questions about his occupation and his employer's name and address. He should have described himself as a "trainee golf professional" and the Court accepted the insurers' evidence that they would have rejected his proposal if they had known that this was his occupation. The question in the proposal form was not limited to paid employment. That he did not deliberately mislead the insurers was deemed irrelevant.

The Court was careful not to express an opinion on whether Whitlam had a claim against his broker, who was not a party to the proceedings. However, the case illustrates the dangers created if a broker makes alterations to answers when producing a form in order to obtain a quotation by computer.