Utmost good faith and calculation of loss

The lengthy judgment of Flaux J in Synergy Health (UK) Ltd v CGU Insurance plc [2010] EWHC 2583 (Comm) was largely concerned with factual evidence. However, there are important points of principle made by the learned judge: in relation to misrepresentation, it was held that a statement made during the currency of the policy was to be treated as a representation for the purposes of renewal; in relation to non-disclosure, the court discussed the various forms of waiver of disclosure; in relation to both misrepresentation and non-disclosure, the court considered the issues of materiality and inducement; and, in relation to business interruption, the judgment discusses the measure of indemnity.

Synergy: the facts

The claimant assured, Synergy, provided laundry and related services to the NHS. Synergy’s premises, plant and equipment were insured under a Combined Commercial Policy against, inter alia, material damage and business interruption losses, from 30 April 2005 to 29 April 2006, renewed until 30 April 2006 to 29 April 2007. There were four participating insurers who had acted through an underwriting agent, Fusion, and the insurance was placed by brokers Towergate plc. The insurers’ quotation included ‘General Terms’ which referred to: