Wellington Underwriting Agencies is facing a £750,000 damages claim in a dispute over a fire at a health and fitness club in Potters Bar.
Property owners Fairmead, and club operators Sportz Academy alleged Wellington had declined to confirm whether the premises were covered, and that it unreasonably delayed a decision to confirm cover, according to their High Court claim
Fairmead and Sportz Academy are claiming damages, and estimate that the blaze caused around £250,000 damage to the building, and £500,000 in losses for contents and business interruption.
Wellington, which manages Syndicate 2020, issued a policy to Sportz Academy on 5 April 2005 covering fire and damage to contents and business interruption losses.
In early September, Fairmead arranged cover with Wellington, through a broker, for the two companies' interest in the building and loss of rent, the claim said.
Wellington, the companies alleged, agreed to insure Fairmead but did not issue a formal policy document.
Problems started on 5 October 2005, when a fire at the property caused serious damage, it is claimed.
The companies asked Wellington to confirm through the insureds' loss assessors that it would cover their losses, but the companies had no confirmation of cover.
Wellington declined to comment.