03 February 2014
Can I obtain a defendant’s insurance details?
Is a defendant obliged to provide their insurance details to a claimant, so they can be sure the defendant (via their insurer) will be able to pay a successful claim?
The short answer is that you are not generally entitled to find out anything particularly useful in this regard!
This is because the contract for insurance between an insurance company and their client is confidential between them. However, where professional indemnity insurance is compulsory the usual position (in accordance with The Provision of Services Regulations 2009 (regulation 8n)) is that they must supply their insurance company’s details and territorial coverage of their insurance.
If you’d like to find out even more useful information about an insurance policy, such as policy limits or a confirmation that an insurer has accepted a risk, these need not be supplied to a claimant (see the case of Dowling v Bennett Griffin  EWHC 1995 (Ch), and XYZ v Various companies (PIP Breast Implant Litigation)).
That said, (in the XYZ case), the Court decided, in the circumstances of that case (where one defendant was technically insolvent, though still trading), to order (under CPR 3.1(2)(m)) the defendant to supply witness statement evidence regarding its ability to pay for the litigation on the basis this information was relevant to the allocation of court resources to, and therefore to the management of, the litigation.
So, in those fairly limited circumstances, where there was an issue of a defendant’s solvency, the court found a way round the confidential nature of an insurance contract. This position will be strengthened to a degree where insolvency is an issue, once the Third Party (Rights Against Insurers) Act 2010, section 11 and Schedule 1 comes into force (such as whether the insurer has denied liability under their policy).
To try and provide some protection one should of course consider the company’s accounts, though bear in mind that they are only a historic view of the company’s finances; and (apart from asking for the insurance company’s details and territorial coverage) to be prudent – even though there is no legal right to demand this information - you should ask the defendant whether their insurance is effective, whether their insurers been notified of the claim and that the insurer have confirmed to them that the policy will respond to it.
Once this has been done one just has to take the commercial risk that the defendant can afford to pay a successful claim.
If, ultimately, the company can’t afford to do so (and their insurance does not cover some or all of the claim) it would be worth considering whether a Director might be personally liable to pay the claim, but that is a whole subject on its own!