In this English judgment, the court considered whether it was appropriate to impute to individual underwriters’ material information they did not actually know, but the claims team did. 

The George Hotel was destroyed in a fire in July 2019.  The first claimant, The George on High Limited, owned the hotel but the hotel and restaurant business was operated by the second claimant, The George on Rye Limited. The insurer had insured the hotel for many years.  The insured was described as “The George on High trading as The George on Rye”.

The insurer accepted liability for the property damage to the hotel but declined to pay the business interruption claim on the basis that The George on Rye was not insured under the policy.

The George on Rye had paid the insurance premiums for many years and in previous policy years the insurer’s claims handlers had dealt with and accepted liability under the policy for claims notified against the George on Rye.

At no time had the insurer’s claims team denied liability because The George on Rye was not insured.  The insured argued that because the insurers’ claims team knew of the claims against The George on Rye the insurance should be accepted as covering The George on Rye.

The insurer argued that the claims’ handler’s knowledge of The George on Rye’s involvement should not be imputed to the underwriters.  The insurer relied on a 1995 judgment of Mahli v Abbey Life Insurance [1995] 4 Re LR 305 as authority for the legal proposition that something cannot be said to be known to an underwriter if that something requires the aggregate of multiple facts known by different people within the insurance organisation.

The judgment pre-dated the “Fair presentation” requirement legislated for by the UK Insurance Act of 2015 in respect of which the 2023 court held that an underwriter in the case ought to know those matters known to the insurer’s claims’ handlers. 

On a proper construction of an insurance policy, the “insured“ included the hotel and restaurant operated by The George on Rye.  The court said it would also probably be prepared to order rectification of the policy to reflect that position.

The court also said that because of the claims teams’ historic dealings, the insurer could not deny that The George on Rye and its business was insured under the policy.

Electronic connectivity, the nature of data storage, and easy internal accessibility and sharing of information within an insurer are likely to result in a similar outcome, as a matter of general principle, under South African law. Where information is held by different departments and teams at insurers available for interrogation, a court is likely to hold that knowledge of the insurer’s claims team is to be considered knowledge of the insurer’s underwriters and vice versa.