Wednesday 13 December 2017

Bakery only discovered €1.15m under-insurance after fire destroyed premises

A BAKERY claims a broker was negligent in the insurance policy it sold after it turned out to be under-insured to the tune of €1.15m following a fire.

The Flat Bread Company Ltd, makers of premium flat breads, was based in Clara, Co Offaly before the fire in January 2015 totally destroyed its factory.

It has to move to Tullamore while re-building takes place and, it says, despite the set-back, it is once again expanding its business.

It claims First Ireland Risk Management Ltd was negligent and in breach of duty by mis-selling it a policy which did not provide for proper business interruption insurance.

Mr Justice Brian McGovern entered the case to the Commercial Court list after hearing there was no objection from First Ireland which would be fully defending the claim.

Kieran Walsh, managing director of the bakery company, says in an affidavit First Ireland recommended a "commercial select food and drinks manufacturers" policy, from Travelers Insurance Company.

Among Mr Walsh's claims are that First Ireland failed to take due account of the fact that his firm was an expanding company and the policy should have allowed for an automatic increase of up to 33 per cent of the base sum insured, more suitable to the bakery's requirements.

After the fire, Travelers paid out €1.72m - but this resulted in a loss of €1.15m to the bakery, Mr Walsh says.

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