In March 2025, the UK Court of Appeal found that a provision in a warehousekeeper’s policy that it was a condition precedent to the insurer’s liability that during the currency of the policy the warehousekeeper “continuously trades under the conditions declared and approved by underwriters in writing” was a future warranty not a representation. The court found that this was expressly stated to be a warranty and was therefore governed by section 10 of the UK Insurance Act 2015. It was not a representation falling under the duty of fair presentation in section 3 of the 2015 Act.

Section 10(2) of the 2015 Act provides that an insurer has “no liability under a contract of insurance in respect of any loss occurring, or attributable to something happening, after a warranty (express or implied) in the contract has been breached but before the breach has been remedied”. The provision described what in fact occurred. There was a finding of fact in the judgment in the lower court that the standard trade terms of the Food Storage and Distribution Federation (FSDF) did not apply to the contract which was breached, causing the loss to the third party, who sued the insurer directly because of the insolvency of the insured.  The insured warehousekeeper was therefore in breach of the warranty. The obligation to make a fair disclosure relates to the provision of information upon which the insurers make their underwriting decision and their assessment of the risk and relates to a representation. What was breached here was clearly a warranty.

Section 16 of the Act which prohibits contracting out by a term which would put the policyholder in a worse position to those in the specific provisions of the Act did not apply. There was no attempt at contracting out. The policy expressly stated that the insurer had no liability in respect of a loss occurring after the warranty had been breached. The provision mirrored the provisions of the 2015 Act and did not contract out of those provisions.

A number of other sections in the 2015 Act relied on by the claimant were not applicable because the facts revealed an excluded breach of warranty.

This is the first appellate judgment in England dealing with what are representations and warranties in relation to the 2015 Act and justifies more detailed reading for those entering into contracts of insurance under English law. Note however that a policy issued in South Africa, even if subject to English law, is governed by the South African laws relating to insurers by a licensed insurer, including those relating to misrepresentation and non-disclosure. This law and the law relating to warranties is dealt with under statute and common law.

Lonham Group Ltd v Scotbeef Ltd & Anor [2025] EWCA Civ 203 (05 March 2025)