Client alleges premium was not passed on by broker

Shelborne Insurance Brokers is being sued for more than £300,000 by residential letting company Vendquot in a breach of contract claim.

The claim relates to a fire which "almost completely" destroyed premises in North London.

But when Vendquot submitted a claim for repairs it was found that the policy had lapsed due to non-payment of premium and, subsequently, cover was declined.

In a claim filed at the High Court, Vendquot said it had entered into a contract with Shelborne whereby the broker "undertook, for reward, to act on the claimant's [Vendquot] behalf in procuring appropriate insurance cover in relation to the premises".

Vendquot claimed it paid Shelborne a premium of £1,059 for an insurance policy for the premises. Vendquot said the policy covered "ordinary risks pertaining to residential accommodation, including, but not limited to, cover for fire damage".

Vendquot alleged that Shelborne confirmed receipt of the premium around 8 September 2003. But, according to Vendquot, Shelborne failed to pay over the premium to its sub-broker, Deacon Insurance Services, until around 8 October.

When the claim was made, Deacon found that the policy had lapsed due to non-payment of premium and declined cover

Vendquot said the cost of the reinstatement of the building was £298,000.

The company is also claiming the cost of temporary works amounting to around £18,000, and the value of furnishings destroyed amounting to £15,000.

A Deacon spokesman said: "Due to ongoing legal proceedings we are unable to comment."

When contacted by Insurance Times, Shelborne declined to comment.