I don’t know whether you have business use on this policy or not but it does specifically say that use for merchandise delivery is excluded, and you have said that you were delivering goods to clients.
Straightly speaking therefore, you are not insured for what you are doing.
I can tell you now that insurance companies think they are quite cute here because they will try to trap people into saying things such as you have done.
They will ask what you are doing in the hope that you are honest and then they look at the terms of the policy to see whether it’s excluded and use that as an excuse not to pay.
You need to write to the insurance company (don’t try to deal with it on the telephone) and tell them, as you have done, that you do not do this all the time, it is not a regular occurrence, you do not deliver goods to customers and you only had to do it for whatever reason as a one-off. Therefore unless they agree to indemnify (payout) you will make a complaint in writing to the Financial Ombudsman service for the Ombudsman to determine the matter.
The Ombudsman will then decide whether the insurance company has been reasonable firstly in not paying out and secondly in respect of cancelling the policy. I don’t know what general condition 4 says.
That really is your only option.
Can I clarify anything else for you?
I am happy to answer any specific points arising from this.
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