Executive Summary
- The case concerns insurance claims following a June 2021 fire at a dental practice operated by Clarendon Dental Spa (the Company) and Clarendon Dental Spa LLP (the LLP).
- The Company insured by Zurich and the LLP insured by Aviva both claimed losses; insurers seek to avoid policies citing failure to make a fair presentation of risk.
- Central dispute involves alleged nondisclosure/misrepresentation of insolvency events related to former corporate partners (PDS and JHP) and previous owners (BTB).
- Zurich seeks to amend its Defence to allege the Company gave a false answer to an insolvency question and failed to disclose material insolvency facts.
- The court must decide if these allegations have a real prospect of success under the Insurance Act 2015’s fair presentation requirements.
Sanctions Highlights
- — No sanctions implications identified in the case.
Emerging Risks
- Potential for increased scrutiny on insurers’ underwriting processes regarding historical insolvency and corporate restructuring disclosures.
- Risk of insurance claims being denied or policies avoided due to nuanced interpretations of “fair presentation” and materiality of past insolvencies.
- Possible precedent for insurers to challenge answers to broad insolvency questions covering former partners/directors, increasing litigation risk for insured entities with complex ownership histories.
Geopolitical Impact
- The case involves entities and legal frameworks in the UK (England and Wales).
- Dr Jayendra Patel, a founder, has Indian heritage, highlighting cross-national business ties between India and the UK dental sectors.
- The litigation underscores the importance of UK insurance law compliance for businesses with international or diaspora-linked ownership, relevant to UK-India commercial relations.
Economic Intelligence
- The fire caused substantial property and business interruption losses, triggering multi-million-pound insurance claims.
- The dispute over policy avoidance could impact the financial recovery of the dental practice and related entities.
- The case reflects broader economic risks in professional services sectors reliant on insurance for operational continuity.
- Insurance market may adjust underwriting and renewal practices for professional practices with complex ownership or insolvency histories.
Strategic Recommendations
- Insured parties should conduct thorough due diligence on historical insolvency events and ensure full, clear disclosure to insurers at policy inception and renewal.
- Legal teams should prepare to contest or clarify the scope of insolvency-related questions in insurance statements of fact, emphasizing precise definitions of “partners” and “involved in the business.”
- Insurers should review underwriting questionnaires to reduce ambiguity and potential for misinterpretation regarding past insolvencies.
- Businesses with mixed or evolving ownership structures should maintain detailed records and legal advice on insurance disclosures to mitigate avoidance risks.
- Monitor this case for judicial interpretation of the Insurance Act 2015’s fair presentation duty, as it may influence future insurance litigation strategies.
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**Source Notes:**
Case Title: *Clarendon Dental Spa LLP & Anor v Aviva Insurance Ltd & Anor [2025] EWHC 267 (Comm)*
Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/267.html