Legal Expenses &
Rent Guarantee
Policy
  
Policy No: xxxxx   Date of issue: xxxxx

Underwritten by

:

Pinnacle Insurance Plc

Head and Registered Office : Pinnacle House A1 Barnet Way Borehamwood Hertfordshire WD6 2XX
Company Registered Number : 1007798
Group Policy Number : 02092
Date of Group Policy : 28th July 2005
Policyholder : Composite Legal Expenses Limited
Registered Office : Suffolk House Trade Street Cardiff CF10 5DT

Schedule Insured: xxxxxxxxxxx

Insured Property Address:
xxxx

Policy No: RG/xxxx/gxxxxx

Date of issue: xxxxxxx

Period of Insurance: From: xxxxx To: xxxxxx

Territorial Limits: United Kingdom only unless otherwise agreed with The Coverholder.

Premium: £xx.xx

Endorsements applying:
none


Legal expenses and rent guarantee policy

This policy records that in return for the insured paying, and the insurer accepting the relevant premium , the insurer will provide Legal Expenses and Rent Guarantee cover and will arrange for the benefit to be paid directly to the insured . Furthermore, this policy is subject to the terms and conditions set out below.

1. Definitions

The words listed below have specific meanings when they appear in this policy document in bold:

“Administrator” means the company specified in this policy by the insurer ;

“Deposit” means the sum of money held by the insured or the insured's agent as security for the performance of the tenant's obligations;

“Insured” means the person(s) or company specified in the schedule ;

“Insured Event” means an incident or event relating to the rightful occupation or ownership of the insured property which results in a breach of the tenancy agreement by the tenant and which leads to a claim being made under this policy . For the purposes of the limit of indemnity only one insured event shall be deemed to have arisen from all incidents that are related by cause or by time;

“Insured Property” means the property specified in the schedule ;

“Insurer” means Pinnacle Insurance plc of Pinnacle House, A1 Barnet Way, Borehamwood, Hertfordshire WD6 2XX;

“Landlord” means a person or company who lets the insured property by entering into a tenancy agreement with a tenant;
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“Limit of Indemnity” means the maximum sum payable by the insurer under the policy for all professional costs and payment of monthly benefit in respect of an insured event . The limit of indemnity is the aggregate amount payable regardless of the number of claims the insured may make during any term . The aggregate amount payable under the policy shall not exceed £25,000;

“Monthly Benefit” means the sum of money paid each month by the insurer to the insured in the event of a successful claim and is equivalent to the rent ;

“Offer” means an offer or payment into court (Part 36 offer) with a view to settling the proceedings ;

“Period of Insurance” means a period for which the insured has paid and the insurer has accepted the relevant premium commencing on the start date and ending when cover under the policy terminates;

“Policy” means this Legal Expenses and Rent Guarantee insurance policy, together with the schedule ;

“Proceedings” means civil or arbitration proceedings or appeals arising therefrom;

“Professional Adviser” means the solicitor or accountant or other appropriately qualified person, firm or company appointed by administrator under the terms of this policy to act for the insured ;

“Professional Costs” means in respect of an insured event , unrecoverable fees, costs and disbursements reasonably, properly and necessarily incurred by the professional adviser and the costs (on the standard basis) of any proceedings incurred by a third party for which the insured may be made liable by order of a court or by agreement;

“Prospect of Success” means the insured's likely success in the proceedings decided according to the terms of the policy ;

“Relevant Premium” means the premium payable by the insured to the insurer for this insurance under the policy ;

“Rent” means the amount payable under the tenancy as shown on the schedule ;

“Replacement Tenant” means an occupier of the insured property by virtue of an assignment by the tenant of the tenancy agreement;

“Satisfactory Credit Reference” means the prospective tenant or replacement tenant :
•  has received a credit reference with an Class A rating according to the categories applied by the MARAS Group;
•  has been accepted following comprehensive tenant verifier report from Experian Limited; or
•  has passed the tenant verification report from Equifax Plc;

“Schedule” means the document issued to the insured by the insurer which specifies details of the insured's cover under the policy ;

“Start Date” means the date specified as the start date in the schedule ;

“Tenancy” means:
(i) an Assured Shorthold Tenancy as defined in the Housing Act 1988 (as amended);
(ii) a Company Residential Tenancy (Company Let) created after 28 th February 1997, where a residential property is let to a public limited company (plc) or limited company (Ltd) purely for residential purposes; or
(iii) a written common law residential tenancy agreement created after 28 th February 1997 between individuals where the rent is in excess of £25,000 per annum;

“Tenant” means the occupier of the insured property by virtue of a tenancy agreement;

“Term” means a period of 12 months commencing on the start date .

“Third Party” means an individual or company not defined in any of the above defined terms.

2. Eligibility

For a landlord to be eligible for cover:
(i) the insured property must be and must remain entirely for residential use only during the coverage of the policy ;
(ii) the tenant must be at least 18 years of age;
(iii) the landlord , or the managing agent acting on their behalf, must ensure that the following procedures are adhered to. They must:
  (a);  not allow a tenant into possession of the insured property other than on the basis of an already completed written tenancy agreement duly signed by all parties;
  (b)   ensure that all necessary statutory pre-grant notices are served personally in the correct form on the tenant prior to the granting of the tenancy ;
  (c)   obtain a satisfactory credit reference for the tenant from a licensed credit referencing agency within one month of the tenancy starting or before the second month's rent is due, whichever is sooner;
  (d);  not allow any tenant to occupy the insured property until the first month's rent and dilapidation deposit payment has been paid in cash or payment has been cleared in the landlord's or managing agent's bank account;

  (e);  prepare prior to the granting of the tenancy a detailed inventory of the contents and condition of the insured property ;

  (f)  not allow the assignment of the tenancy to a replacement tenant unless the replacement tenant has been granted a satisfactory credit reference by a licensed credit referencing agency; and

  (g) not allow a tenant into possession of the insured property where the monthly rent is in excess of £2,000, until two forms of identification have been produced by the tenant.

3. Terms of cover

For cover to continue under the policy , the insured , or the managing agent acting on their behalf must:
(i) prepare a detailed schedule of dilapidation as soon as possible after the tenant has vacated the premises; and
(ii) keep clear up to date rental records.

4. legal expenses cover

If during a period of insurance an insured event occurs, the insurer will provide to the insured indemnity for fees not otherwise recoverable for professional costs incurred in the pursuit or defence of civil claims.

5. Legal expenses exclusions
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Benefits will not be paid in respect of any claim:
(i) where in the insurer's reasonable opionion there is an insufficient prospect of success ;
(ii) where the insured event had commenced or occurred before the start date ;
(iii) where the insured event occurs within 90 days of the start date , and the start date occurs more than 30 days after the tenancy commences or the second months rent is due, whichever is sooner;(iv) where at or prior to the start date the insured , in the reasonable judgement of the insurer , should have realised that a claim might occur;
(v) where the insured fails promptly to provide evidence or information reasonably required by the insurer or the administrator to establish whether support can be provided for an insured under the policy ;
(vi) where the insured or anyone acting on behalf of the insured is responsible for anything which in the reasonable opinion of the insurer prejudices either the insured's or the insurer's prospects of success in the prosecution, defence or settlement of the proceedings ;
(vii) where the insured acts without the consent of the insurer or contrary to or in a manner different from the advice of the insurer or the professional adviser ;
(viii) where the insured has failed to adhere to the eligibility criteria and terms of cover specified in this policy ;
(ix) which is false or fraudulent or arises from any deliberate criminal act or omission of the insured ;
(x) which is notified to the administrator more than 45 days after the date of the insured event ;
(xi) arising from war, riot, radioactive contamination, nuclear accidents and similar risks;
(xii) where the amount in dispute is less than £250;
(xiii) in a dispute or conflict of interest between the insured and the insurer , the administrator , mortgage lender or professional adviser ;
(xiv) relating to the damage or loss of the items not contained in an inventory prepared by the insured or the insured's agent and signed by the tenant prior to or at the commencement of the tenancy ;
(xv) arising from:
(a) subsidence or mining or quarrying activities;
(b) the compulsory purchase, placing of restrictions or any other action by any government, public or local authority;
(c) planning law including the Town and Country Planning Legislation;
(d) the construction of or structural alteration to buildings or parts of buildings; or
(e) libel or slander or malicious falsehood;
(xvi) for an application for Judicial Review or for an appeal unless the insurer has given their prior written consent to such costs being incurred;
(xvii) falling within the jurisdiction of a Rent Assessment Committee, the lands tribunal or the leasehold valuation tribunal;
(xviii) relating to the payment or non payment of service charges as defined in the Landlord and Tenant Act 1985 (as amended); or
(xix) for damages, interest, fines or other penalties.

6. Legal expenses limit of cover

(i) There is no cover for professional costs which are:
  (a) incurred in avoidable correspondence;
  (b) incurred prior to written confirmation from the insurer that the claim has been accepted;
  (c) in excess of the limit of indemnity for the policy .;
  (d) in excess of those for which the insurer has given its prior approval in accordance with the terms and conditions of this policy ;
  (e) recoverable from a court, tribunal or elsewhere; or
  (f) incurred in respect of any claim where the insured is, or but for the existence of this policy would be, entitled to indemnity under any other policy or policies.
(ii) The insurer will not be liable for any excess specified in the schedule .

7. Rent guarantee cover

(i) Monthly benefit will be paid in respect of arrears of rent owed on an insured property by the tenant to the insured for up to 12 months or until vacant possession has been gained, whichever happens soonest, subject to the following:
  (a) such arrears occur during the tenancy and the subsequent claim is made during a period of insurance ;
  (b) such arrears occur during the term and the subsequent claim is made during the period of insurance ;
  (c) a claim is promptly notified and the professional adviser decides that there is sufficient prospect of success to gain vacant possession of the insured property and/or recover unpaid rent ;
  (d) action is taken promptly to gain vacant possession of the insured property and/or recover unpaid rent , unless the only reason for not taking action is that the professional adviser advises that the expected costs incurred will be more than any money recovered;
  (e) the insurer has the right at any time under subrogation to pursue proceedings against the tenant .
(ii) Vacant possession must be obtained in accordance with Clause 7.     (i) above before the provision of Clause 7. (ii)   (a) below can be executed:
  (a) after vacant possession the monthly benefit will cease to be payable until such a time that the insured property is in a suitable condition that it may be the subject of a further tenancy . When the insured property is in that suitable condition, then benefit will be paid for a further two months at 100% of the monthly benefit for the first month and 50% of the monthly benefit for the second month. However, all benefit will cease upon:
    (i) a new tenancy commencing within that two month period; or
    (ii) the expiration of the two month period; or
    (iii) expiration of the term ;
  (b) once vacant possession is obtained if the insured property is to be re-let, the rent must be set in accordance with the current market rental value appropriate for the insured property ;
  (c) the landlord must accept any reasonable offer of tenancy .
(iii) Benefit will be paid as stipulated in Clause 7. (i) and Clause 7. (ii) (a) above at a rate of 1/30 th of the monthly benefit for each continuous day that rent is in arrears or that vacant possession benefit is payable. The monthly benefit will be paid monthly in arrears and will only be paid if the terms and conditions of this policy are met.

8. Rent guarantee exclusions

(i) Benefit will not be paid in respect of:
  (a) any claim which would be excluded under Clause 5. of this policy ;
  (b) an amount equal to the first month's unpaid rent ;
  (c) rent once the period of insurance or term has expired or the property is re-let, whichever is the sooner;
  (d) periods for which the insured property is not available for re-letting once vacant possession is obtained;
  (e) any interest on rent in arrears; or
  (f) periods for which the insured property is advertised for sale or is the subject of a contract for sale.
(ii) Where Housing Benefit is to be claimed, any monthly benefit under this policy will not be paid until a decision is given by the Benefits Office. If the Benefits Office decline to pay housing benefit then the monthly benefit will be back dated to the date the insured could first claim.

  If the insured is in receipt of Housing Benefit then any shortfall between the monthly benefit and the Housing Benefit will not be covered under this policy . The insurers liability is only in respect of the full monthly benefit if all conditions for its receipt are met by the insured .

9. Rent guarantee limit of cover
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The insurer shall not be liable for more than:
(i) the limit of indemnity for the policy ;
(ii) 12 months arrears of rent in total; or
(iii) a maximum monthly benefit of £2,000; whichever is the lesser.

10. Alteration in risk

The insured shall notify the insurer as soon as they become aware of any alteration in risk which may materially affect the policy . The insured may be required to pay an additional premium to the insurer .
11. claims procedure

(i) If rent is overdue the tenant and guarantor must be contacted within 7 days to find out why it has not been paid. If rent remains overdue, within a further 7 days the tenant and guarantor must be contacted again.

(ii) Where the insured becomes aware of an existing or potential claim under any part of the policy , the insured shall notify the administrator promptly and in any event no more than 45 days after the insured event by:
Telephone: 01206 366 500
Fax: 01206 366 501
Please quote Composite Legal Expenses Protection
(iii) The insured must comply with any advice given as to the future conduct of the dispute.
(iv) The administrator will send the insured a claim form which the insured must complete giving a full and truthful report of the facts of the claim and return it at the earliest opportunity to the administrator at the following address:
The Claims Manager
Two St John's Street
Colchester
CO2 7AA

(v) The insured must provide documentary evidence as requested by the insurer in the event that a claim is made.

12. Prospects of success

If at any time during the claims procedure the professional adviser considers in their professional capacity that the insured's prospects of success in the proceedings do not warrant continuing with the proceedings , or that the interests of the insured can be better achieved by other means, the insurer shall then be under no further liability to indemnify the insured in respect of the case. The insurer shall provide the insured with a written explanation of their decision. If the insured disagrees with this decision, the dispute must be resolved in accordance with the terms of the policy and the insurer's internal appeals procedure.

13. Conduct of the proceedings
(i) The insurer may make its own investigations into the claim and may, subject to the approval of the insured (which shall not be unreasonably withheld), attempt to reach a settlement of the proceedings .
(ii) In any claim where the appointment of a professional adviser is appropriate, a professional adviser will be nominated to act for the insured by the insurer .
(iii) The insured may notify the insurer of the person or firm whom they wish to act as the professional adviser . The insurer may at their absolute discretion accept or refuse such nomination.
(iv) In any claim where the proceedings are issued, the insured may nominate a professional advisor to act on their behalf.
(v) The professional adviser must:
  (a) confirm in writing that he will enable the insured to comply with his obligations under this insurance; and
  (b) agree with the insurer the rate at which his costs will be calculated. If no agreement is reached the Law Society will be asked to nominate a professional adviser and this nomination shall be binding; and
  (c) promptly inform the insurer of:
    (i) their professional opinion as to the prospects of success of the insured's proceedings ; and
    (ii) an estimate of the total costs likely to be incurred in the proceedings with details of their charging rates.
(vi) The insured must immediately on the appointment of the professional adviser pay any excess shown in the schedule to the professional adviser .
(vii) The professional adviser must keep the insurer fully and promptly informed on the progress of the case, of any change in their opinion of the prospects of success and their estimate of costs during the proceedings.
(viii) The insurer will only meet the professional costs :
(a) which have been agreed in advance by the insurer as to both amount and purpose; and
(b) while prospects of success in the proceedings remain reasonable.
(ix) The insurer reserves the right to take over and conduct the proceedings in the name of the insured at any time.

14. Withdrawal and discontinuance

If the insured withdraws from or discontinues the proceedings without the prior agreement of the administrator then any professional costs incurred and third party costs will become the responsibility of, and payable by, the insured .

15. Co-operation

(i) The insured will co-operate with the insurer / administrator at all times and reply promptly to any correspondence connected with the claim.
(ii) The insured shall give promptly to the professional adviser all information requested and will meet with them whenever requested.
(iii) The insured or the professional adviser must promptly notify the insurer should a conflict of interest arise between the insured and the insurer.
(iv) The insured shall provide all evidence or information required by the insurer and the professional adviser and shall keep them fully and continually informed of all developments relating to the proceedings.
(v) The insured shall, if so requested by the insurer , instruct the professional adviser to submit his bill of costs for taxation by the court or certification by the appropriate professional body.
(vi) The insured shall whenever reasonably possible attempt to recover costs from a third party and shall instruct the professional adviser accordingly.
(vii) The insured or managing agent will attend any court hearing if required to do so by the appointed professional adviser .

16. Rights to information

(i) The insurer shall have direct access to the professional adviser at all times.
(ii) The insurer shall be entitled to obtain from the professional adviser any information, relating to the proceedings , whether or not privileged, and the insured shall, if so requested, immediately give any instructions to the professional adviser which may be required for this purpose.
(iii) The insurer shall be notified immediately in writing by the insured or the professional adviser of any offer made. If the insurer considers the
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outcome of the proceedings to be equally or less favourable to the insured than the offer , the insurer shall have no liability in respect of any further professional costs.

17. Disputes

Any disputes between the insured and the insurer shall be referred to an arbitrator who shall be either a solicitor or a barrister. If the parties cannot agree on their choice of arbitrator, the Law Society may be asked to make a nomination. The arbitration shall be binding and carried out in accordance with the Arbitration Act 1996, as amended, supplemented or re-enacted from time to time. The costs of the arbitration shall be at the discretion of the arbitrator.

18. Cancellation

(i) The insurer may cancel the insured's cover under this policy at any time by giving 14 days written notice to the insured . If no claims have been notified to the insurer a pro rata refund of relevant premium will be made unless cancellation is made in respect of Clause 19. (i) and Clause 19. (ii).
(ii) The insured may cancel their cover under this policy within 14 days of start date and receive a full refund of relevant premium provided no claims have been notified to the insurer . Thereafter, the insured may cancel their cover under this policy by giving written notice to the insurer , however no refund of relevant premium will be made.

19 . Termination

The policy will terminate on the earliest of the following events:
(i) the end of the term ; or
(ii) the insured fails to pay the relevant premium when due; or
(iii) the insured's cover under the policy is cancelled. Notification of a claim will not be accepted for an insured event occurring after termination of the policy .

20 . General conditions

(i) If the insured does not keep to the terms of the policy , they will not be entitled to any benefit under the policy .
(ii) If the insured gave false or misleading information when they applied for insurance cover, and this information would have affected the insurer's decision to insure them, the cover will end. The insurer will not pay any benefit and will refund the percentage of the relevant premium that they think is reasonable.
(iii) The contract between the insured and the insurer is made up of this policy , the schedule , any endorsement and any other information provided by the insured .
(iv) The insurer shall not be bound by any agreement to which they are not a party.
(v) The rights under this policy cannot be transferred to anyone other than the insured .
(vi) The policy cannot be used to protect any person other than the insured .
(vii) The benefit cannot be paid to anyone else or in any way other than as described in this policy.
(viii) When cover under this policy ends it will not have a cash or surrender value.
(ix) All notices and communications sent or received by the insurer will be considered to have been duly sent or received.
(x) The insurer is not bound to give notice when this policy becomes due for renewal.
(xi) The parties to this policy are free to choose the law applicable to it. Without agreement to the contrary, English Law will apply. If the insured lives in Scotland, Wales, Northern Ireland, the Channel Islands or the Isle of Man, they will be entitled to commence legal proceedings in their local courts.
(xii) To improve the quality of its service, the insurer will be monitoring and recording some telephone calls.
(xiii) Insurers share information with each other to prevent fraudulent claims via a register of claims. A list of participants is available on request. In the event of a claim, any information the insured has supplied relevant to this insurance and on the claim form together with other information relating to the claim, will be provided to the register.
(xiv) The insurer is covered by the Financial Services Compensation Scheme (the “Scheme”). The insured may be entitled to compensation from the Scheme if the insurer cannot meet its obligations. The amount of compensation depends on the type of business. Most types of insurance business are covered for 100% of the first £2,000 of a valid claim and 90% of the remaining amount of the loss. Further information about compensation arrangements is available from the Financial Services Compensation Scheme on 020 7892 7300.

21 . Customer service

While it is always the insurer's intention to provide a first class standard of service, if the insured does have any concerns regarding this insurance cover, please address them to:
Customer Relations Manager, Cardif Pinnacle*
Pinnacle House, A1 Barnet Way, Borehamwood,
Hertfordshire, WD6 2XX

Should the insured remain dissatisfied with the outcome of any internal enquiries, the insured has the right to refer the complaint to:
The Financial Ombudsman Service (FOS)
South Quay Plaza, 183 Marsh Wall, London E14 9SR

This procedure will not prejudice the insured's right to take legal proceedings. However please note that there are some instances when the FOS cannot consider complaints.

The insured has the right to refer any dispute under this policy to arbitration.

A leaflet detailing our full complaints/appeals process is available from the insurer on request.

* Cardif Pinnacle is a trading style of Pinnacle Insurance plc.

This policy is evidence of the terms and conditions of the group policy 02092 (28 th July 2005) issued to Composite Legal Expenses Limited. Registered Office: Suffolk House, Trade Street, Cardiff CF10 5DT ; Registered Number: 3248183 and is undertwritten by Pinnacle Insurance plc Head and Registered Office: Pinnacle House, A1 Barnet Way, Borehamwood, Hertsfordshire WD6 2XX. Registered Number: 1007798. and administered by Amicus Legal Limited: Knapton House, 12 Lower Brook Street, Ipswich IP4 1AT. Registered Number: 03524185.

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