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Sean Sweeney v. Cambridge Mutual Fire Insurance Company
Docket No. INS-05-2053, Decision Issued September 23, 2005.

The insured requested a hearing following receipt of a notice of cancellation of a business owner’s policy citing failure to comply with reasonable loss control recommendations. At hearing, the company maintained that an inspection had revealed various serious conditions. The company representative testified that the company provided loss control recommendations to the agent and the insured was given 90 days in which to comply. He noted that the majority of recommendations remained outstanding at the time of the follow-up inspection. The insured disputed certain of the recommendations, including the time frame given to accomplish them. He also stated that certain recommendations had been met.

Held: For the company. The applicable law is 24-A M.R.S.A. § 3007(2)(D) which permits cancellation for an insured’s failure to comply with reasonable loss control recommendations. The risk insured by the company is a boarding and apartment house serving a number of tenants. Thus, the loss control recommendations relating to safety are not unreasonable. In addition, certain other recommendations are relevant to both liability and property exposures. The company required a contractor in four of the outstanding recommendations. In general, a company places itself at a disadvantage when its recommendations specify that a contractor must be retained to determine what, if any repairs are necessary. However, what is necessary to satisfy the recommendation is sufficient evidence of a contractors’ determination. The insured’s testimony that his father is a contractor who determined that certain repairs were not necessary or that certain repairs were adequate is insufficient to meet the applicable recommendation. The insured further lacked documentation of completion of other recommendations. The evidence on record supports the Company’s assertion that the insured has not complied with all of its recommendations. Therefore, cancellation is permitted.

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