Dunlop Haywards has won the right to sue an insurance broker for failing to provide adequate professional indemnity insurance to protect it from High Court claims.

The Erinaceous subsidiary is suing Erinaceous’ insurance arm, Erinaceous Insurance Services, which in turn is suing external insurance broker Alexander Forbes in relation to various insurance claims.

Forbes, acting for Erinaceous Insurance Services, provided £10m of insurance cover for each claim against Erinaceous and an excess of £10m in December 2004.

Since then Dunlop Haywards has faced a number of claims in relation to allegedly fraudulent valuations carried out by Dunlop Haywards’ City office head Ian McGarry.

In breach of instructions

Erinaceous Insurance Services claims that Forbes failed to adequately insure Erinaceous’ as the excess cover only applied to claims against its commercial property management department not its valuation department.

Forbes, now Lockton Companies international, applied to the judge to dismiss the claim against it on the grounds that Erinaceous Insurance Services were informed of the insurance cover being provided.

Mr Justice Field ruled that Erinaceous Insurance Services and Dunlop Haywards have a ‘good arguable case that Forbes acted in breach of instructions.’

The case will now be heard in the High Court at a later date.