A review of Cometsambre SA v Lloyd's Insurance Company SA HIG 5321 [2026] EWHC 1837 (Comm).
The recent judgment of Cometsambre SA v Lloyd's Insurance Company SA HIG 5321 [2026] EWHC 1837 (Comm) highlights the significance of past, repeated incidents which have previously not given rise to any actual claims but which could be said to evidence continuing difficulties and dangers when renewing insurance policies and related to the policyholder’s duty of fair presentation of risk.
Cometsambre was a scrap metal dealer based in Belgium and insured by Lloyds for charterers’ liability of vessels carrying cargoes of scrap metal from Belgium. The claim related to Cometsambre’s renewal of coverage for 2022 when a cargo of its scrap metal, loaded onto a chartered vessel, was involved in a fire on board – this gave rise to a claim against Cometsambre under the charterparty.
Lloyds avoided the policy on the basis that Cometsambre breached its duty of fair presentation of risk by failing to disclose a number of fires that had previously occurred in its consignments of scrap metal, particularly at quayside. Cometsambre denied the fires were material and argued that, in any event, it had provided sufficient information to put a prudent insurer on notice to make further enquiries and that the disclosure of the fires would not have impacted the decision to write the risk or the applicable terms. Lloyds did not pursue that any breach of fair duty of presentation was deliberate or reckless by Cometsambre.
The court considered whether:
The court rejected Cometsambre’s arguments that no relevant person had knowledge of a quayside fire in May 2020. The court turned to available documents provided by a local fire department which confirmed the fire required attendance by the fire brigade and harbour police. Justice Butler found it “very difficult to accept” that the presence of the fire brigade was not reported to a member of senior management and the occurrence of the fire was information which Cometsambre would have or ought to have known about.
Insurers argued that a prudent underwriter would want to take fires on board into account when deciding whether to write the risk and that quayside fires would be treated in much the same way as “on board” vessel fires. The court accepted insurer’s evidence that “the pattern of fires experienced by Cometsambre made it particularly clear that they ought to have been disclosed” and the fact that “Cometsambre may have not identified any particular reason why there had been an increase in the incidence of fires did not mean that they were not material to be disclosed”. Justice Butcher held that it would be “both credible and reasonable” that a prudent underwriter’s decision-making would be impacted by the fact and pattern of such fires to enable them to assess the extent of any fire risk.
Cometsambre argued that underwriters were informed of the nature of the materials being shipped and that insurers should have known the general risks of such a business; they were on notice of the need to make further enquiries if they wished to know of fires not giving rise to claims.
Notably, Justice Butcher held that Cometsambre’s arguments amounted to an “attempt improperly to reverse the burden of ensuring a fair presentation of the risk in circumstances such as this” and the obligation was on Cometsambre. It was not accepted that underwriters should have commissioned a risk survey to review risk management controls and procedures and the information provided to insurers did not place them on notice of the need to enquire about changes in the incidence of fires.
Considering the above, Justice Butcher held that insurers could not be presumed to have known of any of the relevant fires pursuant to s.3(5)(d) of the Insurance Act 2015.
The provision of a questionnaire including only one questionnaire relating to a ‘claims record’ could not be reasonably understood to indicate that underwriters were not interested in any instances of fire which had not given rise to a claim. Further, the court held that the terms of the questionnaire were not sufficiently clear to indicate that the only matter of interest to the insurers was fires that had actually given rise to a claim.
Notably, the decision to not require an updated questionnaire each year did not constitute a waiver of disclosure of material circumstances.
Insurers argued that, had the vessel fires and quayside fires been disclosed, then they would not have renewed the policy in 2022. In determining whether there was inducement, the court put its mind to whether insurers would have refused to enter the relevant policy either on the same or any terms. Justice Butcher found the underwriter’s evidence reliable, noting that the premium on charterers’ liability insurance was low, and that the occurrence of five fires in 20 months was significant and suggested a change in fire risk.
Notably, the court commented that Cometsambre’s cross-examination of the underwriter regarding each instance of fire was an incorrect strategy. Rather, the more appropriate question to be addressed centred on the disclosure of all five fires at the point of renewal as the non-disclosure prevented contemporaneous investigations by surveyors.
While not a new or surprising judgment, Cometsambre SA v Lloyd's Insurance Company reinforces the rights of insurers to avoid coverage if policyholders fail to disclose material facts prior to the inception of policies, including in circumstances where prior incidents did not actually give rise to a claim. The decision demonstrates the importance of underwriting evidence when approaching considerations of inducement and the relevance of patterns of similar events when determining changes in risk patterns. The decision also offers insight into how the court approaches considerations of waiver when assessing each party’s responsibilities under the Insurance Act 2015.
Rebecca Pelekanou - Assistance Solicitor
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