Commercial Investment Arrangement
A company entered into a commercial investment arrangement with another company to develop properties and lend funds for construction. The relationship turned sour because the construction company was obtaining false valuations resulting in substantial losses on resale but to our client’s amazement there was insurance to cover this breach when it occurred but the company was not insured when claim was actually made so could not recover. We should all now be wary as a result of this case in dealings with other companies to ensure not only that they have appropriate insurance but that that insurance has a roll over provision which in effect keeps the insurance going for several years to avoid the problems that arose in this case.
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