British Steel in dispute with insurers over £30m claim

British Steel is in dispute with Zurich Insurance and other insurers about a £30m claim for a damaged blast furnace at its UK, Scunthorpe premises, as it enters insolvency this week. The claim follows an incident in June 2017. The company’s representative Mactavish argues that if the claim been settled sooner it could have helped save the stricken firm, which employs more than 4,500 staff and many thousands more across its UK supply chain. According to insurance governance firm Mactavish, British Steel is in dispute with Zurich Insurance, Liberty and other insurers after an incident forced its operations in Scunthorpe to shut down for safety reasons. Both insurers have confirmed they are working on a property claim with British Steel. The insurers investigated the incident for nine months and rejected the claim in May 2018, said Mactavish. British Steel then hired the firm to review the investigation. Mactavish identified what it believes to be major deficiencies with the investigation and believes strongly that the insurers should settle the claim in full. It said this position is based on the views of leading technical specialists, forensic accountants and insurance lawyers. British Steel updated its claims pack in March, in response to further questions raised by the insurers. But Mactavish said the insurers are yet to respond. British Steel is also seeking further damages from its insurers to compensate for their slow response and incomplete investigation of the claim. The claim remained unresolved this week as British Steel took part in failed emergency negotiations with the UK Government about its future. Bruce Hepburn, CEO of Mactavish, said: “From our review, we feel that Zurich and Liberty’s investigation was incomplete and wrong. It did not interview many of the relevant staff or even identify the blast furnace blowout as the key cause of the claim, which we believe categorically establishes cover under the terms and conditions of the policy. “Given British Steel’s current situation, settlement of this claim would have made a major contribution to securing the survival of this British institution, [which] had finally been returned to profitability as a viable producer of high-end steel products. This claim should really have been settled long before administration was looming,” he added. Mr Hepburn argued that Zurich and Liberty’s CEOs should be overseeing the claim personally. “They [insurers] have been investigating for the best part of two years and have had the latest data pack addressing their questions for over two months now. This is more than long enough and in the circumstances, this delay could prove to be the decisive factor in forcing British Steel under,” he added. A spokesperson for Zurich said the company is currently in the process of working with British Steel to “progress a complex property claim”. “We are reviewing all the evidence related to this claim, including additional information that has only recently been provided, and remain focused on resolving it as quickly as possible,” he said. Liberty said it is working with British Steel to review a property “in light of further information recently provided by management”. It added that it wants to resolve the matter “promptly”.

British Steel in dispute with insurers over £30m claim

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Related Articles