Patrick Bracher (ZA)

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When is a sub-subcontractor an insured (AUS)

By Patrick Bracher (ZA) on December 1, 2022 Posted in Insurance

An Australian supreme court was faced with the question whether a sub-subcontractor was a named insured or agent of the named insured under a general liability policy relating to demolition work on a construction site where a fire attributed to the conduct of the sub-subcontractor caused damage. The court held that on the policy wording … Continue reading

Financial Services Tribunal hold FSCA has no penalty jurisdiction over foreign persons

By Patrick Bracher (ZA) on November 30, 2022 Posted in Finance

In Viceroy Research Partnership LLC and others against the Financial Sector Conduct Authority, the Financial Services Tribunal was faced with the question whether the FSCA had the authority to impose administrative penalties jointly and severally on three partners in a foreign partnership who were not South African citizens nor residents, and the acts allegedly committed … Continue reading

Municipal ordinance banning pit bulls upheld in USA

By Patrick Bracher (ZA) on November 28, 2022 Posted in General

Several dog owners sued the City of Council Bluffs, Iowa, challenging the constitutionality of an ordinance prohibiting pit bull dogs, and lost. The City enacted an ordinance in 2005 which prohibited “any person to own, possess, keep, exercise control over, maintain, harbor, transport or sell within the City of Council Bluffs, Iowa any pit bull. … Continue reading

The nature of a broker’s mandate

By Patrick Bracher (ZA) and Daniel Breier on November 10, 2022 Posted in Insurance

In a decision involving a broker who introduced business to a medical scheme, the court drew an important distinction between a mandate to enter into contracts on behalf of the medical scheme as the principal and a mandate or authority to introduce business to the medical scheme. Where a principal appoints someone to perform juristic … Continue reading

No general enrichment claim is recognised in South African law

By Patrick Bracher (ZA) on November 9, 2022 Posted in General

The Supreme Court of Appeal has reaffirmed that there is no general enrichment action recognised in South African law. The fact that one person is enriched at the expense of another does not automatically give rise to a claim for damages for loss suffered to the benefit of another person. Enrichment actions may be specifically … Continue reading

Loss of use of computer server is not tangible physical loss (US)

By Patrick Bracher (ZA) on November 1, 2022 Posted in Insurance

The insured claimed that the cost it incurred in migrating its customer data to other servers when its cloud service provider went insolvent entitled it to claim damages under a property insurance policy. A court rejected the claim on the grounds that the losses incurred were not damages resulting from “tangible, physical loss” but were … Continue reading

Prescribed rate of interest is 9.75% from 1 November 2022

By Patrick Bracher (ZA) on November 1, 2022 Posted in General

The prescribed rate of interest changed with effect from 1 November 2022 to 9.75% per annum. The previous rate was 9.0%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts unless … Continue reading

What is ‘replacement’ of a statute? (Aus)

By Patrick Bracher (ZA) on October 11, 2022 Posted in Insurance

The interpretation clause in a policy of insurance included a provision that “references to a statute law also includes all its amendments or replacements”. The Australian Quarantine Act had been replaced by the Bio Security Act, 2015 before the policy came into force but was held to be a replacement statute. The court held that … Continue reading

Data is not tangible property for the purposes of a property insurance policy (US)

By Patrick Bracher (ZA) on October 10, 2022 Posted in Insurance

The claim arose from efforts to recover gold from the wreck of the SS Islander which sank off the coast of Alaska in 1901 carrying gold valued at the time at $6 million. One party to a joint venture recovery company withheld computer data, photographs, videos, imaging, readings, logs and journals downloaded on a media … Continue reading

Downing of Flight 17 by Russian-backed separatists was ‘insurrection’ under war exclusion (US)

By Patrick Bracher (ZA) on October 5, 2022 Posted in Insurance

The family of a student, who died in 2014 when the Donetsk People’s Republic, a Russian-backed separatist group in eastern Ukraine, shot down Malaysia Airline’s Flight 17, sued Western Union for damages for “providing ongoing and essential financial support to the DPR by facilitating money transfers”. The court held that Western Union could not recover … Continue reading

UK Conduct Authority backlog causing serious frustration

By Patrick Bracher (ZA) on October 4, 2022 Posted in Insurance

South African readers will be interested to hear that, according to a recent article in Insurance Day,severe delays at the UK Financial Conduct Authority in approving senior hires are causing strife and harming competitiveness. System errors are allegedly also leading to threats of fines that are unwarranted and later withdrawn. Part of the problem is … Continue reading

Cover ‘afforded’ by umbrella policy means cover ‘provided’ (US)

By Patrick Bracher (ZA) on October 3, 2022 Posted in Insurance

The insured sought cover under a catastrophe umbrella policy when a claim under the underlying policies had been dismissed for late notice. The umbrella policy covered “any claim alleging bodily injury, personal injury or property damage, insurance for which is not afforded by the underlying policies”. The court held that the word “afforded” in the … Continue reading

Mould damage from burst pipe not caused ‘solely’ by mould (US)

By Patrick Bracher (ZA) on September 30, 2022 Posted in Insurance

A burst boiler pipe at a hotel resulted in mould damage to the property. An exclusion stated “damage caused solely by mould is not covered under this policy”. The court found that the language “caused solely by” indicates a distinction between mould as a loss and mould as a cause of the loss. The triggering … Continue reading

Liability excluded for motor vehicle used as tool of trade (Aus)

By Patrick Bracher (ZA) on September 26, 2022 Posted in Insurance

An Australian Supreme Court dismissed a claim for a contribution by one insurer against another because the earthmoving plant loader that was involved in the accident was being operated at the time as a mechanical tool of trade. A tool of trade was defined to mean “the operation of your motor vehicle whilst engaged in … Continue reading

Motor policy indemnity refused for kidnap and assault by insured using insured vehicle (US)

By Patrick Bracher (ZA) on September 21, 2022 Posted in Insurance

A Montana Supreme Court rejected an extraordinary claim by the insured who had kidnapped, physically assaulted, threatened, restrained and injured his estranged wife using the insured vehicle in the course of the kidnap. The court had no difficulty in finding that the insured’s conduct was not accidental for the purposes of the policy and that … Continue reading

What circumstances must be disclosed by a director negotiating a contract? (Aus)

By Patrick Bracher (ZA) on September 16, 2022 Posted in Insurance

The insured company represented by its sole director and shareholder agreed to construct a residential aged care building on the property. The company failed to disclose at a material time that the company was in severe financial distress and unable to meet its obligations including tax obligations. The Australian Federal Court held that the failure … Continue reading

What are ‘circumstances’ known to a director under a D&O Policy (Aus)

By Patrick Bracher (ZA) on September 14, 2022 Posted in Insurance

Where a Directors and Officers Policy provided that the insurer was not liable in connection with any claim based on “any circumstance which was known about by any of the Directors or Officers or Company prior to the Period of Insurance”, it was held that the word “circumstance” meant a circumstance which was known by … Continue reading

Keeping a company’s contract alive creates a ‘personal advantage’ for a director under D&O Policy exclusion (Aus)

By Patrick Bracher (ZA) on September 12, 2022 Posted in Insurance

An Australian federal court held that where a director failed to disclose the financial distress of his company to the prejudice of the other contracting party under a constructions contract, the director “gained personal profit or advantage” for the purposes of an exclusion of the Directors and Officers Policy and no claim was payable by … Continue reading

Email to unattended mailbox is a ‘claim made’ under insurance policy (Aus)

By Patrick Bracher (ZA) on September 9, 2022 Posted in Insurance

An Australian federal court held that an email intimating a claim against the insured under a Directors and Officers Liability Policy to a mailbox that was not attended to was nonetheless “received” by the insured for the purposes of the policy. The claims made policy defined a ‘Claim’ as a “written notice received by a … Continue reading

Claim rejected for misrepresentation and fraudulent claim (Aus)

By Patrick Bracher (ZA) on September 5, 2022 Posted in Insurance

A claim for damage to a concrete pump fitted to a truck was denied by an Australian Supreme Court on the grounds of misrepresentation and nondisclosure regarding the pre-insurance unit’s history and a fraudulent claim in which pre-existing damage was denied. The insured had owned the unit for some time but had not insured it … Continue reading

Prescribed rate of interest is 9.0% from 1 September 2022

By Patrick Bracher (ZA) on August 31, 2022 Posted in General

The prescribed rate of interest changed with effect from 1 September 2022 to 9.0% per annum. The previous rate was 8.25%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts unless … Continue reading

Insurance professional services exclusion applies to a sleep study company (US)

By Patrick Bracher (ZA) on August 29, 2022 Posted in Insurance

A Georgia US court found that the insurer did not have to defend a sleep study company from a negligent suit by the family of a deceased patient because a professional services exclusion applied to the claims in the underlying action. The company conducted sleep studies for its patients and sought an indemnity from the … Continue reading

Insurers not liable for shareholder claim for listeria outbreak (US)

By Patrick Bracher (ZA) on August 29, 2022 Posted in Insurance

A creamery was sued by shareholders who allege that the company’s share price declined because the executives breached their fiduciary duty by continuing to allow the company to produce and distribute ice cream when knowing that some products tested positive for listeria. The policy did not cover a shareholder lawsuit claiming financial harm but only … Continue reading

Cybercrime held to be a social engineering loss not computer fraud under policy

By Patrick Bracher (ZA) on August 19, 2022 Posted in Insurance

Cybercrime held to be a social engineering loss not computer fraud under policy The insured was defrauded when a bad actor tricked the company CEO into wiring nearly $600 000 into the bad actor’s bank account. It was held that the loss was covered under the social-engineering-fraud cover with a limit of $100 000 and not the … Continue reading