Topic: Insurance

Tribunal upholds Prudential Authority penalty for unrecorded loan & dividends directive

By Patrick Bracher (ZA) on October 15, 2021 Posted in Insurance

An October 2021 decision of the Financial Services Tribunal upholding an administrative order, a directive, and a penalty by the Prudential Authority is worth noting. The Tribunal held there was no basis for successfully challenging the penalty for an intergroup loan arrangement not recorded in writing and for unjustified dividends paid. A small licensed life … Continue reading

Interpretation of Business Interruption insurance and Covid-19 USA style

By Donald Dinnie on October 15, 2021 Posted in Insurance

In a September 2021 appeal judgment in Ohio USA, the court held that the State’s order to suspend all in-person dining operations at restaurants to slow the spread of the virus resulting in considerable loss of revenue for the insured was not a loss covered under the insured’s business interruption policy “caused by direct physical … Continue reading

Liability of boom operator for personal injury

By Donald Dinnie on October 14, 2021 Posted in Insurance

Some of our readers, like the author, will have experienced a near-miss from a descending boom at a carpark entrance. In an October 2021 judgment, the plaintiff successfully claimed for personal injuries sustained when the boom at the carpark operated by the defendant descended and struck her. The plaintiff alleged that her injuries were caused … Continue reading

Covid-19 business interruption Australian judgment mostly favours insurers

By Donald Dinnie on October 13, 2021 Posted in Insurance

In this, second, Australian test case for business interruption claims relating to Covid-19 the court said that “[A] policy of insurance is assumed to be an agreement which the parties intend to produce a … businesslike interpretation … …a construction that avoids capricious, unreasonable, inconvenient or unjust consequences, is to be preferred where the words … Continue reading

Cyber risks again

By Patrick Bracher (ZA) on October 11, 2021 Posted in Insurance

We have been mentioning for some time the pandemic-like risks associated with cyber events. According to a recent Airmic survey cyber rates have risen by as much as 400% for some insureds. Cyber risks are therefore said to be the most likely new risks to be financed by captives. If a systemic cyber event should … Continue reading

When can an insured institute action to recover its excess from a third party wrongdoer?

By NRF Digital Team on October 5, 2021 Posted in Insurance

This blog was co-authored by: Anika de Kock, associate and Zinhle Mdluli, candidate attorney The doctrine of subrogation literally means the substitution of one party for another as creditor. The doctrine is an incidence of the law of indemnity. The Court would allow the insurer to do so “in the name of the insured whether … Continue reading

Prescription of business interruption insurance claims (UK)

By Donald Dinnie on October 1, 2021 Posted in Insurance

Prescription arose in a UK case dealing with a business interruption claim arising from damage to the insured’s gym facilities when the premises were broken into and vandalised. Damage was caused to the toilets and wash hand basin and there was flooding of the premises. Exercise bikes, furniture, mirrors and other equipment were damaged and … Continue reading

Unconditional performance guarantees are unconditional

By Patrick Bracher (ZA) on September 29, 2021 Posted in Insurance

The Supreme Court of Appeal has again emphasised that a performance guarantee in terms of which the guarantor undertakes to pay an amount if the contractor fails to perform the required work is unconditional. The beneficiary of the guarantee is not obliged to prove an entitlement under the principal contract before it can make a … Continue reading

‘Strategic response costs’ v ‘ex gratia’

By Patrick Bracher (ZA) on September 28, 2021 Posted in Insurance

A recent US case referred to an interim payment to injured third parties as ‘strategic response costs’ covered under the policy. That is a neat phrase to use instead of an ex gratia payment. ‘Ex gratia’ is always controversial because it implies a payment without a lawful obligation. Ex gratia payments are often made for … Continue reading

Litigation funding is not insurance

By Donald Dinnie on September 20, 2021 Posted in Insurance

In the High Court Steinhoff judgment, it was argued that the litigation funding agreement between the class representative and the funder was a contract of insurance in terms of which the funder provides indemnity insurance to the class representative in consideration for the funder being paid a premium, being a percentage of the ultimate reward. … Continue reading

Insured loss to value of damaged and repaired vehicles

By Patrick Bracher (ZA) on September 14, 2021 Posted in Insurance

In the US state of Georgia, the formula applied with court backing since 2001 for determining how much a car’s value diminishes after a wreck and repair is “the difference between pre-loss value and post-repair value”. Attorneys for two plaintiffs brought a class action alleging that the insurer was underestimating the value of repaired cars … Continue reading

Exploding vape excluded from policy by ‘products completed’ exclusion

By Patrick Bracher (ZA) on August 24, 2021 Posted in Insurance

An electronic cigarette store failed in its claim for an indemnity from its insurer for a vape battery that exploded in a customer’s pocket away from its premises. The policy excluded an event “occurring on any premises other than the designated premises shown in the schedule”. The products-completed exclusion clearly precluded coverage for bodily injury … Continue reading

Extended business cover confined to physical not financial loss by government Covid-19 action (Aus)

By Donald Dinnie on August 19, 2021 Posted in Insurance

In this August 2021 judgment, the Federal Court of Australia in Star Entertainment Group Limited v Chubb Insurance Australia Limited [2021] FCA 907 had to deal with the interpretation of an insurance policy of the insureds who owned and operated various casinos and associated businesses. The insureds allege that the government’s directions in connection with … Continue reading

Burglary claim fails for failure to install a burglar alarm (US)

By Patrick Bracher (ZA) on August 13, 2021 Posted in Insurance

The roof of a sweet shop was damaged when a tree fell onto the building and destroyed part of the roof on 9 April 2019. On 19 May 2019 it suffered an additional loss from a burglary by thieves who entered through the broken roof. The claim failed because of a breach of a policy … Continue reading

Insurance policies and time bar clauses

By Donald Dinnie on August 6, 2021 Posted in Insurance

The Mpumalanga High Court in this May 2021 judgment upheld the insurer’s reliance on the time bar clause in the policy. (H Qhibi v MiWay Insurance Ltd (634/2017) [2021] ZAMPMBHC 12) The insured’s claim could not be entertained because it had been brought well after the expiration of the time bar period. It was common … Continue reading

Illegal drug held to be excluded contaminant from insurance policy (US)

By Patrick Bracher (ZA) on August 6, 2021 Posted in Insurance

A US court found that liquid and solid forms of the illegal drug methamphetamine (a highly addictive stimulant known as meth and by other names) was an excluded “contaminant” for the purposes of a house owner’s insurance policy. The insured’s grandson resided with the insured. The police executing a search warrant discovered liquid and solid … Continue reading

Claim denied for professional services exclusion and interpretation rules (US)

By Patrick Bracher (ZA) on August 5, 2021 Posted in Insurance

While performing services on a construction site owned by a Port Authority, an employee of a contractor slipped and fell on wet soil and rocks because of unsafe working conditions and sued for damages. The construction management firm, Techno, was insured under a comprehensive general liability policy. When the port authority was sued by the … Continue reading

Misrepresentation inducing a contract is not a breach excluded by the contractual exclusion clause in a policy (US)

By Patrick Bracher (ZA) on August 4, 2021 Posted in Insurance

A US court found that the exclusion in an insurance policy against losses arising out of or involving a breach of contract or agreement did not exclude a claim resulting from a misrepresentation that induced the contract. The insurer was excused from paying the amount of an arbitration award arising from a business dispute which … Continue reading

Non-disclosure did not induce lower premium for insurers (UK)

By Patrick Bracher (ZA) on July 27, 2021 Posted in Insurance

The UK court of appeal refused to avoid a mobile plant policy plus extension on the grounds of non-disclosure of risk-related information because the lower premium was the result of the insurer’s underwriting practices and their own mistake not of the non-disclosure. The insured was in the business of waste collection and waste recycling and … Continue reading

Interpreting the wording of a subscription judgement

By Donald Dinnie on July 27, 2021 Posted in Insurance

In a July 2021 judgment the Supreme Court of Appeal in Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others (470/2020) [2021] ZASCA 99 considered the question of how to interpret the wording of a subscription agreement in dispute which governed the basis on which a sale of shares … Continue reading

Jurisdiction over an insurance dispute where both parties are foreigners

By Donald Dinnie on July 21, 2021 Posted in Insurance

In this judgment both the insured and insurer were foreign peregrini, that is neither was resident nor domiciled in the Republic of South Africa. The insured was a resident of the Virgin British Islands and the insurer, Russia. The policy provided that it was governed by the laws of the insured’s country of domicile, that … Continue reading

A pension fund cannot challenge the Pension Fund Adjudicator’s section 37C decision

By Michelle David on July 20, 2021 Posted in Insurance

A pension fund failed in its application for reconsideration of the Pension Fund Adjudicator’s (PFA) decision to refer the matter back to the fund for reconsideration because, according to the Financial Services Tribunal the fund is not a ‘person aggrieved’ as required by section 230 of the Financial Sector Regulation Act of 2017. The fund … Continue reading

Psychiatric centre not covered for excluded sex assault claim (US)

By Patrick Bracher (ZA) on July 8, 2021 Posted in Insurance

In June 2021 the Pennsylvania Superior Court held that a psychiatric centre had no claim against its insurer for a sexual assault lawsuit brought by two patients of the centre because the policy limited cover to claims brought by any employee. The policy also excluded any claim which “involves an allegation of patient molestation” but … Continue reading

Contra proferentem and standard contracts including insurance policies (Aus)

By Patrick Bracher (ZA) on July 7, 2021 Posted in Insurance

The 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