Court of Appeal ruling ‘provides vital clarity for insurers’
The decision by the Court of Appeal in Milton Furniture v Brit Insurance Limited (now known as RiverStone Insurance Limited) gives welcome guidance on the meaning of "unattended" in the context of commercial premises, says RPC, the City-headquartered law firm.
The case centred around a 2005 warehouse fire in which the property of a furniture hire business was destroyed. The fire broke out overnight and was started by a person or persons unknown. The intruder alarm, which was required to be in use when the Insured's premises were left unattended, had not been set. The General Manager and a subcontractor were staying overnight in a house attached to the warehouse and were both asleep at the time. The issue in dispute was whether the presence of two men sleeping in different parts of the premises to where the fire was started amounted to the premises being "left unattended".
RPC, which represented RiverStone, explains that yesterday’s decision has provided clarity and guidance in relation to determining the meaning of "attendance" for insurers in the context of commercial property insurance:
- A property may not be regarded as ‘attended’ simply due to the mere fact that an individual is present in one part of a large building;
- "Attendance" requires a level and degree of attention such that the insured or its agent is in a position to observe any attempt by anyone to interfere with it.
- A building is ‘unattended’ if there is no attention being paid to it.
- "Attended" is not synonymous with ‘occupied’.
Victoria Sherratt, Partner at RPC, comments: "This is a welcome ruling for insurers as it provides clear guidance on how courts should interpret ‘attended’ and ‘unattended’ – terms which are fundamental to a vast number of commercial property insurance contracts. We always felt very strongly that "attendance" required more than mere presence and are delighted that the Court of Appeal has backed that principle."