Insurer International Transport Intermediaries Club (ITIC) has warned of the potential costs of being an expert called in to investigate casualties.
It has revealed a case of an explosion on a yacht in a marina that resulted in an insurance claim.
An expert appointed by the insurers to investigate the cause of the loss concluded that the explosion and fire were the result of a deliberate act by the owner.
The insurers rejected the claim for a number of reasons, and the owner challenged the decision in the local court, which found in favour of the insurers because the owner had been working on the vessel without the requisite authority.
But the owner then claimed EUR 650,000 ($739,000) in damages for defamation over the arson conclusion.
"The insurers wanted the expert to pay the costs of the defence of the defamation claim, based on the fact that it was the allegation in the expert’s report that had given rise to the issue," ITIC said.
"ITIC, however, persuaded the insurers that they should support their expert, especially since they were, in part, relying on the report to reject the claim."
ITIC argued that, if it turned out that the report was negligent, the insurers could make a claim against the expert which would fall under their ITIC cover but, until then, the insurers should defend the expert.
This was accepted and the claim was ultimately rejected by the courts.
ITIC added: “In addition to potential liabilities, even an ‘innocent’ expert can face substantial legal costs dealing with a claim. At best, only a proportion of these costs will ever be recovered.”
