Why gained’t our insurance coverage pay out for a fault in constructing work? | Cash

We constructed a £49,000 annexe three years in the past. Final 12 months we discovered some effervescent within the exterior render, which the builder agreed to deal with.

There have been numerous delays attributable to climate and cancelled appointments after which we acquired discover that the agency was in liquidation. Thankfully, the deal included “a assure within the occasion of the builder ceasing buying and selling”, so we despatched a declare to the insurers however they’ve stated that as a result of the fault was recognized earlier than the builder ceased buying and selling, it isn’t lined. We’ve been quoted £1,600 plus VAT to restore that wall – although the builder warned the opposite three are prone to have the identical drawback. JL, Birmingham

Yours is a grimly acquainted story – reassuring guarantees from the gross sales blurb and a nasty sting within the small print. The assure was offered by IWA which says it doesn’t cowl faults arising earlier than a dealer ceases buying and selling. “The scheme has phrases and circumstances that are made fairly clear and a ‘key info sheet’ is distributed with each coverage,” it says.

Nevertheless, these make no point out of this significant caveat, merely stating remedial works shall be lined if the provider ceases buying and selling.

The exemption is detailed half-way down the phrases and circumstances. This could possibly be your solely hope.

The Monetary Providers Ombudsman confirms that assure safety insurance policies like this one don’t usually cowl works that the provider doesn’t get spherical to finishing earlier than going out of enterprise, however that this ought to be made clear to clients.

It is best to refer your paperwork to the Ombudsman who will determine whether or not the “key info sheet” ought to have highlighted this. In the event that they discover that it was not made clear sufficient it would award compensation.

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