Topic: Insurance

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Laws amendment to accommodate demarcation regulations

The pending changes to the Medical Schemes Act and the Long-term and Short-term Insurance Acts to accommodate the demarcation regulations were made on 1 April 2017 including the new definition of ‘business of a medical scheme’. The definition of ‘business of a medical scheme’ in the Medical Schemes Act 1998 makes it clear that if you … Continue reading

Exclusion for medical services in a medical malpractice claim (US)

Over a 150 patients claimed damages against a hospital because of an outbreak of fungal meningitis and related infections which resulted from the patients receiving injections with contaminated substances. The court held that there was no claim under the insurer’s commercial package policy based on personal injury claims because the policies excluded bodily injury ‘due … Continue reading

Operation of retroactive date

Where an insurance policy had a retroactive date so that there was no indemnity for any claim ‘arising from or in any way involving any act, error or omission committed’ prior to 5 June 2009, the court held that the indemnity was due because there was no direct or indirect causal connection between the events preceding … Continue reading

What is a written demand for damages or relief?

A professional indemnity policy required the insured to give notice to the insurer of any ‘written demand for monetary damages or non-pecuniary relief’. A letter from solicitors reserving rights to pursue a claim and expressing the view that there was a strong claim against the insured was held not to be a written demand and … Continue reading

Failure of PI insured to report potential malpractice suit (US)

The question debated in a claim under a lawyers’ professional indemnity policy was whether the attorneys could have reasonably expected the underlying malpractice action and should have reported it to their insurers. The insurers argued that a claim should have been expected from an expressly unhappy client. The attorneys said the suit was not reasonably … Continue reading

Cover for collapsed crane excluded by a contractor’s equipment exclusion (US)

A New York Court of Appeals rejected a claim for collapse of a tower crane during Hurricane Sandy because the policy had an exclusion for ‘contracted tools, machinery, plant and equipment’. It rejected the insured’s submission that the crane was covered as a ‘temporary structure’. Readers will remember the traumatic images of the boom of … Continue reading

Will we get reciprocal reinsurance arrangements?

The FSB’s Reinsurance Regulatory Review Position Paper in September 2016 sketches a reinsurance regime by which foreign reinsurers wishing to reinsure South African risks will have to register as a licensed branch in South Africa unless the foreign reinsurer is regulated by a country with an equivalent regulatory framework according to the FSB. Presumably the … Continue reading

What is an enquiry for legal expenses in insurance (EU)

Mr Massar took out legal expenses insurance managed by insurers DAS. Under Netherlands employment law, his employer applied to the Employee Insurance Agency, a public independent body, to terminate his employment contract on the ground of redundancy. Mr Massar employed an external lawyer to assist him at this stage against unjustified dismissal. DAS said that seeking … Continue reading

Mudslide is not an explosion (US)

An insured unsuccessfully contended that the destruction of a building during a mudslide was an explosion under the policy terms. Torrential rain in Boulder, Colorado in September 2013 triggered a mudslide that cascaded down a hill and destroyed the property, leading to a loss of $1.3 million. The policy excluded losses due to water-based causes, including … Continue reading

Directors and officers policy does not cover executive-induced decline of company (US)

A California company specialising in plumbing fixtures unsuccessfully sought cover under a directors and officers policy for a claim brought by three former directors based on the decline of the business because of the chief executive’s erratic behaviour. The court held that the so-called ‘insured-v-insured’ exclusion unambiguously bars coverage for a claim such as that … Continue reading

Communication via brokers held not to be privileged

A US court has ruled that communications between lawyers and insurers which passed through a London broker are not privileged. This is because entrusting lawyer advices to a third party, such as a third party broker, amounts to a waiver of privilege since those communications are no longer confidential. The London brokers acted as nothing … Continue reading

Deterioration of plastic bags by sun as an accidental occurrence

The US Appeal Court in Iowa held that manufactured plastic bags that deteriorated in sunlight because of the absence of an ultraviolet inhibitor and caused small shreds of plastic to commingle with a customer’s landscaping materials requiring clean-up was an accident and therefore an occurrence under their comprehensive general liability policy. The policy provided coverage … Continue reading

A US double insurance contribution case

A Los Angeles appeal court ordered two excess insurers to contribute pro rata to a $4 million settlement of a lawsuit by a building inspector who was paralysed after falling from a ladder at a construction site. Westchester Insurance Co was the excess insurer of the general contractor and Hudson Specialty Insurance Co was excess insurer … Continue reading

Is anti-competitive behaviour insurable?

The August 2016 first-of-its-kind judgment against South African Airways in favour of Nationwide Airlines, for damages arising from conduct that was held to be an anti-competitive exclusionary act preventing Nationwide from entering into or expanding within the travel market, raises the interesting question whether the loss is insurable by the company and the directors. SAA … Continue reading

US liability policy covers consequential loss from faulty workmanship

In July 2016 the New Jersey Supreme Court held that damage by rain water leaking into residential condominium premises because of a subcontractor’s faulty workmanship constituted property damage and an accidental occurrence under the property developer’s commercial general liability insurance policy. Under the policy ‘property damage’ included ‘physical injury to tangible property’ and an ‘occurrence’ … Continue reading