THE BOTTOM LINE
- A deal is a deal: An insurance contract is binding once your broker or advisor gives the instruction. You are liable for the premium even if the insured event is later canceled.
- Pay to play: Failing to pay the premium voids your coverage. A Dutch court confirmed that a company that hadn’t paid its €15,000 premium had no right to claim nearly €1 million in losses.
- Don’t assume debts are forgiven: A notice from a collection agency that it is “closing its file” does not mean the underlying debt is waived by the creditor. Explicit confirmation is required.
THE DETAILS
This case centered on an unpaid event insurance premium. The event organizer, Hockeyloverz B.V., had instructed its insurance advisor to secure a policy from Heinenoord Assuradeuren B.V. for a planned event. Heinenoord issued the policy and a corresponding invoice for €15,345, which Hockeyloverz never paid. When Heinenoord sued for the premium, Hockeyloverz argued that no valid contract had ever been formed. The Rotterdam court disagreed, pointing to decisive evidence: an email from Hockeyloverz’s own advisor confirming the instruction to “issue the policy.” Furthermore, in a later email, Hockeyloverz acknowledged the outstanding invoice, stating it could not pay at that moment. The court ruled this was a clear admission of the debt, cementing the existence of a binding agreement.
Hockeyloverz presented several defenses, all of which were dismissed. First, it argued the insurer had waived its right to collect the debt because a third-party collection agency had sent a notice that it was “closing the file.” The court found this unconvincing, ruling that Hockeyloverz could not reasonably assume the debt was forgiven without direct confirmation from Heinenoord itself. The company also argued that since the event was canceled due to COVID-19, there was no longer an insurable risk. However, the court noted that the policy was already in place, and Hockeyloverz failed to prove it had notified the insurer of the cancellation before the contract was finalized. Arguments of mistake (“dwaling“) and force majeure were also rejected for lack of substantiation.
In a bold move, Hockeyloverz filed a conditional counterclaim for €971,080 to cover the costs of the canceled event, should the court find the insurance policy valid. This strategy backfired completely. The court affirmed the policy was valid but immediately pointed to a fatal flaw in the claim: the policy’s own terms and conditions. Article 21 clearly stated that insurance coverage lapses if the premium is not paid on time. Since Hockeyloverz had never paid the €15,345 premium, it had no coverage and therefore no right to claim for its losses. The court dismissed the nearly €1 million counterclaim, leaving the event organizer liable for the original premium, interest, and all legal costs.
SOURCE
Source: Rechtbank Rotterdam
