Posted in InsuranceAn insured loss must be caused legally and factually by the insured peril. Even where factual causation is established legal causation does not automatically follow. In Concord Insurance Co Limited v Oelofsen N.O. (1992) the court said that in the contractual context policy considerations do not enter the enquiry (unlike in criminal law or delict, … Continue reading
Posted in InsuranceThe interpretation process is objective, not subjective. Where the meaning of any policy is clear, effect must be given to it. The court cannot substitute what it regards as reasonable, sensible or business-like for the words actually used. The court should not in those circumstances rewrite the contract made by the parties. Courts should not ‘make … Continue reading
Posted in InsuranceA court may not refuse to enforce contractual terms on the basis that the enforcement would, in its subjective view, be unfair, unreasonable or unduly harsh. It is only where a contractual term or its enforcement is so unfair, unreasonable or unjust that it is contrary to public policy that a court may refuse to … Continue reading
Posted in InsuranceAt common law, in the absence of a fraud clause in the insurance policy, fraud can only be relied upon to the extent to which it prejudices the insurer. If an element of the claim is fraudulent only the fraudulent portion of the claim is forfeited at common law. There is no implied term in … Continue reading
Posted in InsuranceAmbiguous insurance contracts may be construed against the insurer. In case of doubt and where there is ambiguity a contract, including an insurance policy, may be construed against the contracting party by whom it was formulated. This is generally known as the contra proferentem rule (see for example, Pereira v Marine and Trade Insurance Co … Continue reading
Posted in InsuranceAn insurance contract is presumed to require that the insured peril must be the proximate cause of the insured’s loss (see Incorporated General Insurance Ltd v A.R. Shooter trading as Shooter’s Fisheries 1987). Causation involves two distinct enquiries namely factual causation and then legal causation. The test for factual causation is generally described as the … Continue reading
Posted in InsuranceThe Supreme Court of Appeal judgment of Centriq Insurance Company Limited and Oosthuizen contains a useful summary of the general principles of interpretation of insurance policies and other contracts: Insurance policies are contracts like any other. Contract provisions must be construed having regard to their language, context and purpose in what is a unitary exercise. … Continue reading
Posted in InsuranceIn this judgment, the court held that the indemnity period applicable to the relevant non-damage business interruption extension of the policy was eighteen months and not three months as contended for by the insurer. The judgment is fact specific and turns on the policy wording and structure. It establishes no new principles. The court applied … Continue reading
Posted in InsuranceThe New South Wales Court of Appeal, considering the wording of a business interruption policy in the context of a Covid-19 claim, dealt with the contra proferentem rule which provides that any ambiguity in a policy of insurance should be resolved by adopting the construction favourable to the insured. The court remarked that the contra … Continue reading
Posted in InsuranceThe insured, in an Israeli Supreme Court case, claimed under a jewellers block policy alleging he had been a victim of a violent robbery in which diamonds and cash worth approximately $11 million had been stolen. The evidence established that diamonds worth about $6 million of the claim were in the insured’s stock and had … Continue reading
