In November 2015 Darryl found that the fridge on his boat, the Dolphin, wasn’t working. After changing over the batteries, Darryl called in an electrician to inspect the Dolphin. The electrician found that not only was the fridge not working but all the electrical components on the Dolphin had been ‘fried’.
The electrician noted that, to cause the damage, the inverter must have failed and suspected that the likely cause of the r failure was a power surge while the Dolphin was plugged into the mains supply. The electrician contacted an electrical inspector to check the Dolphin and the mains supply.
The electrical inspector found that the plinth at the marina where the Dolphin was connected had a damaged RCD. The inspector concluded it was more likely than not there had been a power surge which had damaged the plinth and in turn damaged the inverter and all the electrical components on board the Dolphin.
Darryl contacted his insurer, Secure Sailing, to claim for the cost of repairing the damage.
Secure Sailing said the damage was not covered under Darryl’s policy. The policy said it would not cover the cost of repairing or replacing any part of the boat due to “electrical breakdown or failure”. Secure Sailing considered that the inverter’s failure was the cause of the damage and if the inverter had not failed, there would not have been any damage to the rest of the electrical components. Secure Sailing told Darryl that the inverter may have failed because of fair wear and tear.
Darryl did not think that Secure Sailing had reasonably assessed his claim and he complained to FSCL.
We found that Secure Sailing had applied a very strict and literal interpretation of the policy wording. We asked Secure Sailing what would have happened if there was an external event, such as a lightning strike, that caused the inverter to fail? Secure Sailing said that if an external event was found to be the proximate cause of the damage then the cost of the damage would likely have been covered under the policy.
We asked Darryl if he had any further evidence that it was a power surge that had caused the inverter to fail. Darryl contacted the power company that operated the plinth, but it could not identify that there had been any power surge at the time the Dolphin was connected. The power company did however say that surges happen from time to time and not all of them are recorded.
We discussed with Secure Sailing that, on all the evidence available, it was more likely than not that the proximate cause of the damage to the Dolphin’s electrical components was the power surge rather than the failure of the inverter. This was based on the expert evidence of the electrician, the electrical inspector and the power company’s acknowledgment that not all power spikes are recorded.
Secure Sailing accepted that it was more likely than not that there had been a power surge that had caused the damage. Even though the inverter failed, it was only a contributing cause, and not the proximate cause of the damage to the other electrical components. Because the damage was caused by an accidental external event, Secure Sailing accepted Darryl’s claim under the policy and paid for the $10,000 repair cost.