Topic: Insurance

COVID-19 insurance: closure orders are not physical loss (USA)

By Donald Dinnie on August 25, 2020 Posted in Insurance

An American court has confirmed that government shutdown orders did not constitute ‘direct physical loss’ that would trigger an indemnity under the commercial insurance held by a group of restaurants (in Rose’s 1 LLC et al v Erie Insurance Exchange). The court said that: insurance policies are to be enforced in accordance with the real … Continue reading

Court applies ‘arising out of the operations’ exclusion in liability policy (US)

By Patrick Bracher (ZA) on August 16, 2020 Posted in Insurance

A Texas federal judge ruled that the insurer did not have to defend a design and construction consultant against the employer’s liability claim for a defective oil well because cover was excluded for property damage to ‘that particular part of real property on which any contractor working directly or indirectly on your behalf are performing … Continue reading

Interpreting insurance contracts: a refresher (part 5 – fairness and reasonableness)

By Donald Dinnie on August 6, 2020 Posted in Insurance

A 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

Fraudulent insurance claim denied

By Donald Dinnie on July 30, 2020 Posted in Insurance

The 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

Interpreting insurance contracts: a refresher (part 4 – fraudulent claims)

By Donald Dinnie on July 28, 2020 Posted in Insurance

At 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

COVID-19, business interruption and physical damage

By Donald Dinnie on July 19, 2020 Posted in Insurance

In South Africa and the United Kingdom, coronavirus coverage disputes are centring around the interpretation of various non-damage extensions provided under the policy’s business interruption section. In North America, both in Canada and the United States, the focus has been whether COVID-19 caused direct physical loss or damage to the insured property triggering business interruption … Continue reading

Interpreting insurance contracts: a refresher (part 3 – ambiguity)

By Donald Dinnie on July 16, 2020 Posted in Insurance

Ambiguous 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

Interpreting insurance contracts: a refresher (part 2)

By Donald Dinnie on July 13, 2020 Posted in Insurance

An 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

Business interruption, infectious disease extensions and causation

By Donald Dinnie on July 10, 2020 Posted in Insurance

Readers will have seen the recent Guardrisk judgment. The applicant, a Cape Town restaurant, sought urgent declaratory relief that the insurer was obliged to indemnify it in terms of the business interruption section of the policy for loss suffered as a result of the closure of the restaurant from 26 March 2020. The infectious disease … Continue reading

Cyber risk cover – the pandemic lesson

By Patrick Bracher (ZA) on July 7, 2020 Posted in Insurance

One lesson for insurers from the COVID-19 pandemic is that carefully considered wording for potentially massive losses is essential. Cyber risk can lead to such losses. Here are links to some of the articles we have written on cyber risk to remind you: Cyber risk warnings for insurers Cyber cover must be specifically provided or … Continue reading

Interpreting insurance contracts: a refresher (part 1)

By Donald Dinnie on July 2, 2020 Posted in Insurance

The 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

Refund of overpayment of insurance benefit because error was excusable

By Siyabonga Mathe on June 24, 2020 Posted in Insurance

An insurer (like any other erroneous payer) can recover a benefit erroneously paid under an insurance policy if its conduct in making that payment was not inexcusably negligent. In deciding whether the erroneous conduct is excusable, the court will take into account a number of factors, including: the relationship between the payer and the recipient; … Continue reading

Insurance renewal not concluded by emails in the absence of clear acceptance (Aus)

By Patrick Bracher (ZA) on June 16, 2020 Posted in Insurance

When a fire and other perils policy came up for renewal on 24 August 2018, the insurer and the insured’s broker exchanged emails regarding renewal terms and hold-covered arrangements. The Victoria Supreme Court in Australia found that cover had not been renewed nor extended because the insured had not unequivocally accepted the renewal terms nor … Continue reading

Avoidance and cancellation of non-life policies: The Comic Book Edition

By Donald Dinnie on June 12, 2020 Posted in Insurance

Welcome to Volume 5 of our Big Read Book Series: The Comic Book Edition. You can download your copy here, and identify your favourite insurance director. This volume should be read together with Volume 2 of the Big Read Book Series. Both deal with the avoidance and cancellation of non-life policies. We are pleased that … Continue reading

DUI proved despite no conclusive blood test

By Patrick Bracher (ZA) on May 4, 2020 Posted in Insurance

The motor policy considered in Bantho v Alexander Forbes Insurance Co Ltd excluded an indemnity if the accident occurred while the driver was driving under the influence of intoxicating liquor or while the level of alcohol in the bloodstream exceeded the statutory limit. The court applied the exclusion despite a dispute about the accuracy of … Continue reading

Defending an insured’s third-party claim and reserving insurer’s rights

By Donald Dinnie on April 28, 2020 Posted in Insurance

From time to time liability insurers may agree to begin defending a claim for an insured while reserving their rights to deny coverage because investigations are not yet complete. Sometimes the policy wording provides expressly for that situation. Or insurers may reserve their rights on an ad hoc basis While there is no South African … Continue reading

COVID-19 and the insurance market

By Donald Dinnie on April 6, 2020 Posted in Insurance

Have a listen to my podcast discussion with the editor of Cover magazine on the potential implications of COVID-19 on the insurance industry in South Africa. We discuss business interruption insurance, liability insurance, event cancellations and travel insurance. Where to start in evaluating insurance exposure for brokers, insurers and reinsurers is covered. Traditional business interruption … Continue reading

‘Occurrence’ in insurance policies

By Donald Dinnie on March 24, 2020 Posted in Insurance

The test enunciated by the English court in Kuwait Airways Corporation v Kuwait Insurance Co [1996] 1 Lloyds Rep 664, confirmed in Mann and Another v Lexington Insurance Company [2000] is no different in South African law. “An ‘occurrence’ (which is not materially different from an event or happening, unless perchance the contractual context requires … Continue reading

The Big Read Book series – Volume 4

By Donald Dinnie on March 22, 2020 Posted in Insurance

Norton Rose Fulbright’s collection of South African insurance judgments for 2019 is now available here. 2019 saw a limited number of insurance disputes determined by way of litigation. The various alternative dispute resolution mechanisms used by the insurance industry continue to function well and deliver a tremendous service to insured and insurer alike. Volume 4 of … Continue reading

Council for Medical Schemes banning of low cost benefit options

By Lolo Mhaga and Michelle David on March 19, 2020 Posted in Insurance

Healthcare has found its way into everyday conversations more so than in recent years. The steadfast movement towards a National Health Insurance has inspired vigorous yet contrary emotions with each side holding their position with equal conviction. On 4 December 2019 a decision by the Registrar and Chief Executive Officer of the Council for Medical … Continue reading

Insurance claims and COVID-19

By Donald Dinnie on March 18, 2020 Posted in Insurance

If you haven’t already dusted off the business interruption, liability and event cancellation policies you have underwritten, or placed for an insured, and checked for coronavirus coverage, now is the time to do so. Exposure and benefits of both business interruption coverage (covering the insureds losses from an abrupt shutdown) and contingent business interruption coverage … Continue reading

Interpretation of an EAR Policy’s defect exclusion clause

By Donald Dinnie on March 5, 2020 Posted in Insurance

A Greek appeal court was recently called upon to interpret the exclusion under the Contractors’ Erection All Risks Policy which read: “the insurer shall not Indemnify the Insured for … The cost of replacement, repair or rectification of loss due to defective material and/or workmanship. This exclusion shall be limited to the insured items directly … Continue reading

Causation, the ‘but-for’ test and flexibility

By Donald Dinnie on February 24, 2020 Posted in Insurance

A defendant is not liable unless their wrongful conduct in fact causes the claimant’s harm. The defendant is also not liable merely because their conduct in fact caused the claimant’s harm. There must be both factual and legal causation. The long accepted test of factual causation is the ‘but-for’ test. One asks whether the claimant’s … Continue reading

Indemnity and disclaimer clauses relating to school children: 12 things to know

By Donald Dinnie on February 10, 2020 Posted in Insurance

If you, as a parent or guardian of a minor child, sign a disclaimer clause, you might lose the right to sue the school for damages you suffer (in your own right) relating to your child’s death or injury, which was negligently and wrongfully caused by the school. A parent or guardian can never lawfully … Continue reading