In this judgment, the South African appellate court, in referencing co-insurance clauses (which was in content a follow-the-lead clause), said:

“In order to determine the proper meaning of the co-insurance clause, it is necessary to have regard to its purpose.

In my view, the object of this clause was to protect the insured so that it could have its claim dealt with conveniently and expeditiously by the leading insurer, without the delays, the costs and uncertainties which might arise if each of the different co-insurers adopted a different attitude in respect of one or more of the issues of substance or procedure in consequence of the filing of such a claim. That object would clearly be frustrated if one or more of several co-insurers were entitled to resist a claim by the insured on the ground that the leading insurer had been wrong in making one or other decision relating to the insurance granted by the relevant policy.”

The clause read:

Co-Insurance Clause” It is agreed that all Insurers who have subscribed hereto are bound by the decisions of the Leading Insurer and will follow the same rates terms, conditions, claim settlements and all other matters relating to the insurance granted by this policy as may be agreed by the Leading Insurer. It is further agreed that all endorsements hereto will be legally binding cm all Insurers when signed by the Leading Insurer.”

Where there is more than one insurer on risk, whether by way of co-insurance or otherwise, an appropriate clause dealing with, among other things, notification and claim obligations of the insured under the policy, those insurers’ rights and obligations in assessing, rejecting and paying any claim, and exercise the rights of subrogation should be clearly recorded.