DRN-6221204

The complaint S, a limited company, complains about what Allianz Insurance Plc did after it made a claim on its business protection insurance policy. What happened S is an off-licence business. In February 2022 there was a break in and theft at its premises which caused damage and a loss of stock (mainly cigarettes). S said all the cigarettes it kept in a gantry and storage drawer had been taken and they had a value of £20,000. It sought reimbursement of that amount from its policy. After investigating Allianz accepted there had been a loss to S but didn’t think it was £20,000. It thought there were inconsistencies in the information S provided and its accounts and trading evidence didn’t support it held tobacco stock to that value at the time of the loss. It offered to pay £8,000 (net of VAT and the policy excess) which reflected the value of stock S had said was stolen when it reported the theft to the police. Our investigator thought it was reasonable of Allianz to take into account the information about the loss S provided to the police. She didn’t think the information S subsequently provided showed a higher value of tobacco had been stolen and the settlement offer Allianz had made was reasonable. She didn’t think there had been any significant delay by it in progressing the claim. S didn’t agree. It said Allianz hadn’t properly investigated the true level of stock held at the time of the theft including detailed assessment of the capacity of the gantry or a forensic review. It said the gantry capacity (and storage drawer) did support a loss significantly higher than Allianz had offered in settlement. And information given to the police at a moment of stress shouldn’t be relied on. In addition, its policy schedule set out that the amount insured for tobacco was £20,000. And a lower stock level stated in its accounts represented an assumption rather than the actual figure. So I need to reach a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. The relevant rules and industry guidelines say Allianz has a responsibility to handle claims promptly and fairly. It shouldn’t reject a claim unreasonably. The terms and conditions of S’s policy say it covers “Damage to the Property Insured caused by any of the Events shown occurring during the Period of Insurance”. Those events include “Theft or Attempted Theft following upon or followed by forcible and violent entry to or exit from the Premises”. Damage’s is defined as “Loss or destruction of or damage”. And property insured includes “All trade contents belonging to the Insured or for which they are responsible in the Premises”.

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There’s no dispute a theft meeting the terms of the policy has taken place in this case and there’s been a loss of trade contents belonging to S as a result. The issue is what the extent of that loss is. And the onus is on a policyholder to show that, on balance, they’ve suffered the loss they’re claiming for. It’s also a condition for cover to be provided under this policy that the insured shall “furnish with all reasonable despatch at the Insured’s expense…such further particulars and information as the Insurer may reasonably require”. S’s position is that the gantry could contain 1400 packets of cigarettes. And it was fully stocked at the time of the loss. It thought the value of that was around £16,000 which taken together with stock in the storage drawer of £3,500 represented its loss as a result of the theft. It said Allianz hadn’t carried out any proper assessment as to whether that was the maximum capacity of the gantry and drawer. However, I don’t think Allianz has disputed what the potential capacity of the gantry and storage drawer was. And I appreciate the sum insured for tobacco set out on the policy schedule was £20,000. I can also see the police report records S’s representative as saying the “vast majority” of tobacco stock had been stolen following the break in at its premises. But the amount in the policy schedule represents the total liability Allianz has for this element of stock in the event of a valid claim. It doesn’t in itself evidence that loss has actually taken place. And while I appreciate S says the gantry and drawer were fully stocked at the time of the theft I think it was reasonable of Allianz to have concerns as to whether that was in fact the case. The police report records S as saying the total loss of stock (which suggests it covers more than just tobacco) had a value of between £10,000 - £15,000. I appreciate S’s representative will have been providing that information at a point when he was stressed having been a victim of crime but I think it was reasonable of Allianz to use that as a starting point when considering what the loss to S was. And I don’t think the other evidence then S provided does show its loss was greater than the settlement figure Allianz offered. It’s accounts for the year ending November 2022 show a total figure for stock of £27,240. S has suggested tobacco comprised around 55% of its stock (though I’m not clear whether it’s been able to further evidence that). In any case that doesn’t support a loss to the value it claimed for. I recognise S has subsequently said the information in its accounts was inaccurate but I think it was reasonable of Allianz to place some weight on what appears to be a specific figure for the stock held in November 2022. S also provided evidence from the tobacco manufacturer who I understand visited its premises a week prior to the loss and gave an estimate of stock held. However, it appears that was based on an assumption the gantry was full rather than being based on a documented analysis as to whether that was in fact the case. So I think it was reasonable of Allianz to place less weight on this information. Allianz also took into account information provided by S’s accountants and noted that its tobacco purchases for the six month period prior to the theft amounted to around £35,000. However, for a stock level of £20,000 to remain at the point of the loss it concluded there would have to be an abnormally low volume of tobacco sales in that period which doesn’t appear to be supported by other evidence. Again I think that was a reasonable conclusion to draw from the information provided. Taking all of that into account I think it was fair of Allianz to conclude S hadn’t evidenced a loss to the value of £20,000. S says Allianz didn’t carry out a forensic review but it’s for S to evidence its loss. I think the analysis Allianz did carry out was appropriate in the circumstances. I don’t think the settlement offer of £8,000 it then made was unreasonable

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and I don’t think S has shown its loss was greater than that. I appreciate the claim has taken some time to progress but I’ve not identified significant periods of delay for which Allianz was responsible. So I don’t think there’s anything it needs to do to put things right here. My final decision Allianz Insurance Plc has already made an offer to pay £8,000 to settle the complaint and I think this offer is fair in all the circumstances. So my decision is that Allianz should pay S £8,000 (if it hasn’t already done so). Under the rules of the Financial Ombudsman Service, I’m required to ask S to accept or reject my decision before 26 May 2026. James Park Ombudsman

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