Liberty Mutual Insurance Europe has been fined £5.28 million ($9.5 million) for failures related to mobile phone cover offered through a third party.

The UK’s Financial Conduct Authority found some claims were unfairly declined or not investigated adequately and the third party’s complaints process was flawed.

“Fair, effective and prompt settlement of claims is a fundamental requirement of mobile phone insurance,” Enforcement and Market Oversight Director Mark Steward said.

“Insurers must put in place adequate measures to make sure claims and complaints are handled fairly, especially where those functions are outsourced.”

Redress payments of nearly £4 million ($7.2 million) were taken into account when setting the penalty, while Liberty also qualified for a 30% discount for settling early in the investigation. The breaches were between July 5 2010 and June 7 2015.

The customer base for mobile phone cover designed and administered by the third party grew from about 40,000 in February 2011 to 380,000 at the start of 2013 and 1.3 million by “the end of the relevant period”.

Liberty underwrote the product and retained regulatory responsibility.

The FCA says about 6000 customers were unfairly denied loss or theft claims if they failed to download and install a particular app, while an exclusion for unattended loss was inappropriately used. Some claims were denied due to suspicion of fraud, despite insufficient evidence, and there was an over-reliance on voice analytics software.

About 11,000 customers who complained risked not having their concerns dealt with fairly, impartially and consistently.

Liberty has stopped writing new mobile phone insurance, the FCA says.

An FCA mobile phone insurance review in 2013 noted cover was not always designed to meet consumers’ needs. Examples included claims being denied when phones were accidentally left in taxis and hotel rooms, because they were “public places”.