Maritsave Ltd v National Farmers Union Mutual Insurance Society Ltd.

An insurer relying on a warranty concerning the security of unoccupied premises must establish both a breach of the warranty and that the breach contributed to the insured damage. The burden lies on the insurer to prove a causative breach on the balance of probabilities.

Where the evidence leaves plausible alternative means by which an intruder could have entered, the insurer cannot establish that an alleged insecure door or window caused the loss. Credible evidence of regular inspections may establish compliance with security requirements, particularly where the opposing physical evidence is inconclusive.

The claimant owned an unoccupied property insured against fire under a policy containing an unoccupied-property warranty. The warranty required external doors to be securely locked, windows to be firmly secured and regular inspections to be carried out.

After the property was extensively damaged by an arson fire, the insurer refused indemnity. It alleged that rear door D4 or window W2 was insecure and that the intruders entered through one of them. The central issues were whether the claimant had breached the warranty and whether any breach contributed to the fire damage.

1. Burden and issues. The insurer bore the burden of proving, on the balance of probabilities, both a breach of warranty and a causal contribution by that breach to the damage.
2. Door D4. The claimant’s director gave clear and detailed evidence that he regularly inspected the property, physically tested the external doors and saw both bolts engaged on D4. His credibility was not challenged. The court accepted that evidence. The expert evidence did not establish that the lower bolt could not have entered its keep, and there was no evidence that D4 had been opened or that its bolts had been disengaged before the fire.
3. Window W2 and roof lights. The evidence established plausible alternative means of entry through roof lights W15 and W16. The court accepted the fire fighter’s evidence that he saw a hole and a flapping roof light at an early stage of the fire-fighting operation. The expert evidence about differing heat damage to roof-light fragments was consistent with entry through the roof. Entry through W2 was also a plausible possibility. The evidence that clean broken glass had protected part of the carpet supported, but did not prove, pre-fire breakage. The court rejected entry through the tiled roof because there was no evidence supporting it.
4. Conclusion. The insurer failed to establish that D4 or W2 was insecure or that entry was obtained through either. The alleged breach of warranty was therefore not proved. The claimant succeeded on liability and was entitled to a declaration of indemnity and damages for breach of the policy.