This is an interesting case summary for many commercial insurance brokers;
Edwin Coe secures full £1.249m damages award after broker recommends cheaper insurance policy that leaves Camstar Herbs exposed to significant losses
One of the world’s largest dried parsley producers has secured at least £2.38 million in court-ordered payments after a major factory fire exposed serious failings in its insurance cover, highlighting wider risks facing British manufacturers.
London law firm Edwin Coe successfully represented Camstar Herbs Limited in a professional negligence claim against Advisory Insurance Brokers Limited, trading as Morgan Law Insurance Brokers. The High Court awarded Camstar the full £1.249 million claimed in damages, with interest, an additional award and an interim payment towards legal costs bringing the current total to £2.38 million.
Camstar, the world’s largest producer of dried parsley outside China, operates two processing facilities in Suffolk. In August 2021, a fire severely disrupted production at one of its plants, which handled around 60% of its harvested parsley.
Although Camstar recovered substantial sums from its insurers, it was unable to recover payments it continued making to growers and its harvesting contractor. These payments were essential to maintaining the supply relationships on which its future operations depended.
The dispute arose after Camstar’s broker recommended (without apparently appreciating the difference) switching from a gross revenue business interruption policy to a cheaper insured profit (also known as a gross profit) policy in 2018. The change saved just over £7,000 in annual premiums but left the company without cover for these ongoing payments.
In his judgment, His Honour Judge Bird found that the broker had breached its duty to Camstar by recommending unsuitable insurance without explaining the difference in cover. The Court also rejected the argument that the payments could have been recovered under the policy as an increased cost of working.
The case highlights a wider vulnerability for British manufacturers, particularly those dependent on specialist suppliers, seasonal production and long-term purchasing commitments. While a fire or other major incident can halt production overnight, businesses may still need to meet substantial financial obligations to protect their supply chains and ensure they can restart. Those costs may fall outside business interruption insurance if the policy does not reflect how the business operates.
Oliver Pannell, Partner in the Insurance Disputes team at Edwin Coe, said:
“This case should be a wake-up call for British manufacturers. A factory fire can stop production overnight, but it doesn’t mean a business can simply stop paying its suppliers and contractors. Those relationships may be essential to its survival.”
“Camstar continued paying its growers and harvesting contractor because it had no commercial option other than to make the payments. Yet the insurance its broker had recommended didn’t cover those payments.”
“Manufacturers need to know that their insurance reflects the financial realities of their operations. Camstar saved around £7,000 a year by switching policies, but that decision left it facing losses of more than £1.2 million. Brokers have a responsibility to understand those risks, what the key differences are when recommending alternative policies, and recommend appropriate protection.”
“We’re very pleased to have recovered the full amount claimed in damages for Camstar. The judgment is an important reminder that businesses and their brokers need to understand exactly what their insurance will cover if something goes wrong.”
Edward Starke, Chief Executive and Managing Director at Camstar says
“After experiencing such a devastating fire, the last thing we expected was to discover that payments to some of our most important suppliers and harvesters weren’t covered by our insurance. These are relationships that are fundamental to our business, and we felt incredibly let down by the broker we had trusted to make sure we were properly protected.
“As a family business this has been a hugely difficult and frustrating experience, not to mention having to take the matter all the way to trial. We’re relieved to have finally secured this outcome, which means a great deal to us, our suppliers and the wider community that depends on our business.
“We’re extremely grateful to Oliver Pannell and the team at Edwin Coe, as well as Ben Elkington KC, for their determination and support throughout.”
The Court also ordered £360,492 in interest, an additional £75,000 following Camstar’s successful Part 36 offer and an interim payment of £700,000 towards legal costs. Further sums may become payable once outstanding interest and costs are determined.
The High Court refused the defendant permission to appeal.
The Edwin Coe team was led by Oliver Pannell, Partner, who was assisted by Kate Dwyer, Legal Director, and Hallam Lewis, Associate. Ben Elkington KC of 4 New Square acted as leading counsel.
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