Niramax Group says Zurich should pay the claim for a plant fire, regardless of shadow director’s 2010 conviction for attack involving 16-inch machete

A waste management company is suing Zurich for £4.8m after it said the insurer cannot avoid paying a claim regarding a fire at its recycling plant, as reported by Law360 UK.

Zurich claims it can refuse the payment because Niramax Group Ltd failed to disclose that a shadow director, Shaun Morfitt, had been convicted in 2010 for a “frenzied attack” where he wounded another with a 16-inch machete.

In court documents filed on 2 March, Niramax denied Morfitt had ever been a shadow director, and that he had any involvement in the company’s operations.

But Zurich says that in 2014 and 2015, Morfitt’s company, Morfitt Waste Management Ltd, had made sales of around £1.35m to Niramax.

The insurer says Niramax should have known about Morfitt’s criminal convictions.

But Niramax came back saying it had no obligation to disclose the convictions.

It said in its latest court documents: “Before the claimant proposed for the Zurich policy any such conviction had become spent.

“As a result, the claimant was relieved of any obligation to disclose any such conviction, or any circumstances ancillary to any such conviction.”

Niramax claims it is owed £4.3 million for the loss of its mechanical treatment plant, along with three pieces of equipment worth a combined £380,000. It also alleges that three pieces of hired machinery were also damaged or destroyed in the fire.

Niramax also says it had insurance coverage for its buildings at the property and for losses caused by business interruption with several underwriters led by Aspen Insurance U.K. Ltd, which it claims paid out £660,000 under the firm’s policy.

Zurich declined the opportunity to comment, with a spokesman for the insurer saying “it would be inappropriate for us to comment as this matter is subject to ongoing legal proceedings.”