In the course of a judgment dealing with two reinsurance contracts, issued within days of each other with different jurisdiction clauses, the court made the following remarks in passing regarding the description of the one contract as ‘the signed slip’:

“That terminology brings to mind the practice … whereby a binding contract would be included by the underwriter scratching a slip, which both parties intended would be superseded at a later stage by a formal policy … It is not unknown in the insurance market, therefore, for an initially binding contract to be superseded by a later contract potentially containing different terms”

The court referred to two previous decisions in that regard.

The facts in the matter are specific to that case and of no relevance to the point made in this blog.

Many major commercial policies entered into or renewed grant cover from a specified date long before the formal terms of the elaborate policy are determined. Although there will always be an argument about what the initial cover extended to, the backdating of the formal terms to day one is common. If there is a loss in the meantime, the express or implied terms of the original agreement or slip will determine whether the claim is payable.

[Tyson International Company Limited v Partner Reinsurance Europe SE (2024] EWCA civ 363 at para 53 referring to AIG Europe SA v John Wood Group Plc [2021] EWHC 2567 (Com) and HIH Casualty Limited v New Hampshire Insurance Co [2001] EWCA civ 735 at paras 69 to 97]