The insured ran an automotive glass repair company. In 2017 his company had to replace 144 windscreens that had sensors in them. The workmen who did the replacements did not recalibrate the sensors after replacing the windscreens. This resulted in the sensors being unreliable and potentially dangerous. When the problem was discovered, the company recalled and recalibrated 93 of the sensors. Each repair cost roughly between $160 - $1,000.
The insured claimed on the company’s public liability insurance for the cost of all the recalibrations, a total of about $10,000. The company’s insurance policy had a $1,000 excess.
However, the insurer treated each recalibration as a separate claim and found that only four of the recalibrations cost above the $1,000 excess. The insurer offered the insured $1,300 in total for the claim.
The insured felt that this was unfair and complained to FSCL.
The insured and his brokers argued that the claim should be treated as one “occurrence”, not as multiple claims. He sought to have his claim paid in full.
The insurer claimed that each failure to recalibrate the sensors represented a separate occurrence under the policy and therefore, the excess should be applied to each occurrence.
We looked at the evidence and the policy wording to decide whether the failure to recalibrate the sensors in 93 vehicles was one “occurrence”, or whether each failure was a separate ‘occurrence’.
In our view, the cause of the claim was a failure by the workmen to understand that the software in the sensors differed in each vehicle. The defective workmanship claim arose from this same misunderstanding.
We found that there was a sufficient link between the recalibrations for the claim to be treated as arising from one occurrence. The insurer, therefore, should pay the total amount claimed by the insured.
The insurer offered to settle the dispute for $10,500, less the $1000 excess policy. The insured accepted this settlement offer.
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