Insurance claim confusion

[insuranceworries]

Hello,

Am looking for advice on the loss of earnings part of an insurance claim.

I was in a car accident 2 years ago, where someone crashed into me, I was off work for about six months after the accident and had to have another three months off recently following an operation.

I have my own limited company which I formed through an accountant with two shares (one for the director and one for the secretary) for tax purposes.

My insurance company hired a forensic accountant to compile a loss of earnings report for the court and because of the two shares in the company, has come to the conclusion that I am only entitled to 50% of the losses.

Even although I have spoken to my solicitors to explain that the other partner is in effect a silent partner and the true reality is that the company is commercially 100% mine, and I should be entitled to 100% of the losses, they don't seem to be listening.

Has anybody else been through a similar situation or have any advice.

Thanks,

IW

[Fat Dave]

No personal experience of this, but your solicitor needs to be told to shape up.

You are your company's sole revenue earner. As a result of the accident your company lost £x. That is the substance of your claim. Simples!

The only complication I can think of is if your insurance was in your own name covering you only as an individual. In this case your company might need to take out an action against the other party for damages to their asset (you).

Usual disclaimer. IANAL, and this advice is worth what you paid for it.

[Flubster]

As Fat Dave says, are you peronally making the claim, or is YourCo Ltd? If you are as an individual, the I suspect both shareholders need to make a claim.

But this could be complete goolies...IANAA..yadda yadda.

[Pondlife]

Disagree (although IANAL etc).

You and the company are separate legal entities.

You are entitled to 50% of companies profits as a 50% shareholder + your salary. How can you argue otherwise?

Unless you want to argue in court that the silent partner is a convienient (artificial) arrangement to avoid paying tax.

Or have I missunderstood?

[Flubster]

Disagree (although IANAL etc).

You and the company are separate legal entities.

You are entitled to 50% of companies profits as a 50% shareholder + your salary. How can you argue otherwise?

Unless you want to argue in court that the silent partner is a convienient (artificial) arrangement to avoid paying tax.

Or have I missunderstood?

WHS. I guess it could get silly where the other 'silent' shareholder could make a claim when you take a holiday and therefore not generating income.

To my mind, it should be the the OP's limited company that is making the claim for the full amount, and not the individual claiming for their (50%) share of potential dividends.

[Olly]

what a unique way for this kind of stuff to bite back.
sorry to hear about your accident
I guess it cold be even worse and they don't even take dividends into account.

[JonSmile]

did we not have a discussion about this topic before

http://forums.contractoruk.com/accou...nsurance+claim

[insuranceworries]

did we not have a discussion about this topic before

I had a look at that but it doesn't seem relevant to this instance, my insurance company agree that I have lost out as I was off work for about a year.

Unless you want to argue in court that the silent partner is a convienient (artificial) arrangement to avoid paying tax.

As far as I know there is nothing illegal about that?

To my mind, it should be the the OP's limited company that is making the claim for the full amount, and not the individual claiming for their (50%) share of potential dividends.

I have now spoken to another accountant, and this is his opinion, however the case was raised in my name, but he thinks this will still be ok, he can't look into it until next week, so will update you then.

Thanks everyone for your thoughts.

[Flopsy]

Hi there,

I had a similar problem and contributed to the other thread.

A forensic accountant "expert" was hired by the other sides insurance company and made the same claim as the one your insurance company hired. They used Grant Thornton (from memory).

I however hired another company and they argued against this (i.e. that it should be 100%). A Barrister's legal opinion confirmed this and calculations were done and paid on the 100% figure.

It was a personal injury case. We did not go to court as it was settled before at the 100% figure.

It was all a battle of nerves and took years.

Hope that helps.

[Paddy]

Hi there,

I had a similar problem and contributed to the other thread.

A forensic accountant "expert" was hired by the other sides insurance company and made the same claim as the one your insurance company hired. They used Grant Thornton (from memory).

I however hired another company and they argued against this (i.e. that it should be 100%). A Barrister's legal opinion confirmed this and calculations were done and paid on the 100% figure.

It was a personal injury case. We did not go to court as it was settled before at the 100% figure.

It was all a battle of nerves and took years.

Hope that helps.

My contractor colleague had an accident and claimed on his insurance. The insurance company only wanted to pay his normal PAYE income. He argued back that he should get 100% of the company income. Six months latter he issued the insurance company with a County Court Claim for the full amount (£22,000) plus costs (£6,000). The insurance company paid in full two days before the court hearing.