My client bought liability insurance for his business.  When he presented a claim, his insurance company denied the claim and has voided the policy for what it says were “material misrepresentations” on the application for insurance.

Specifically, the insurer says that my client misrepresented that he renovated hotel rooms and that he subbed out much of the work.  According to the insurance company, my client only advised them that he performed “demolition” work.  If what the insurance company said is true, then it probably properly denied the claim and voided the policy.  However, they are wrong.

Like almost all applications for business liability coverage, the application which my client filled out contains a place for the insurance agent to insert a business “classification code.”  The classification code is a number which corresponds with a certain type of business operations.  The business classification code on my client’s application related to demolition and subcontracting the renovation of buildings – precisely what he does for a living.  Therefore, the very application which the insurance company is relying on, proves that the insurer is wrong.

The insurance company filed a declaratory judgment action against my client seeking a judicial determination that it can void the policy for this “material misrepresentation.”  I am defending the dec action claiming that there was no misrepresentation at all.

As with most of my insurance cases, if I win, the insurance company will have to pay my fees and costs; and if I lose, I’ll work for free.