QUESTION:
We have had a PI claim declined on the basis that the compensation awarded against our client is considered by the insurer to be fees, which are excluded under a "refund of fees" exclusion.
The compensation (awarded in a Disputes Tribunal hearing) was for the return of a deposit paid to the insured by their client for the design & construction of a cabin in their backyard.
The deposit covered a range of things, including staff wages, materials purchased for the job, a sales commission and a flat fee to the architect (as a subcontractor to the insured).
Is it correct to say this is considered a "fee"?
The insurer has said: "On the basis that the sum refunded reflects the sums charged/on charged to the claimant, we consider these to be fees."
Thanks!
CROSSLEY GATES REPLIES:
The primary dictionary definition of the word 'fee' is":
a charge or payment for professional services:
a doctor's fee.
Assuming the word is not specially defined in the policy, I suggest that on the face of it a deposit for a design and construct contract with a building contractor (presumably) does not come fully within that definition.
