British maritime insurers cannot use 'collateral lie' as reason to reject claims

The U.K. Supreme Court has ruled that the country's maritime insurers cannot deny payout to a customer who tells a so-called "collateral lie," a falsehood that has no bearing on the claim's value, The Maritime Executive reported.

The ruling stems from an admiralty case, but it is likely to extend to claims in all areas of the U.K. insurance sector. "This decision risks pushing up the cost of insurance and prolonging the payout process for the vast majority of people who are honest customers," said an official at the Association of British Insurers.

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