The due observance of and compliance with the terms, provisions and conditions of the policy by the insured was a condition precedent to liability by the insurer to make payment. This was an after-the-event legal costs policy where the premium was payable once the matter was finalised and the costs could be determined.

The court held that there is no rule that premium is payable at any particular point in time and the policy attached no time limit to the payment of the premium. There was nothing in the policy that imposed a condition precedent for the premium payment which was only calculated once the costs had been established. There had been no request for payment of the premium and the insurers could not rely on non-payment to defeat the claim.

If insurers want the premium paid on a particular date, and if they want to make the cover subject to that payment (subject to days of grace) the policy must say so explicitly.

[The case is Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) PLC]