Topic: Insurance

That sinking feeling – proximate cause and insurance

By Donald Dinnie on January 20, 2020 Posted in Insurance

A German appeal court determined, in a marine claim, that the proximate cause of a vessel’s grounding and ultimate sinking after its main engine cut out was bad weather rather than an engine problem. Accordingly the loss was held to be proximately caused by peril of the sea, covered under the relevant policy. The events … Continue reading

Insurance, consensus and non-existent property

By Donald Dinnie on January 14, 2020 Posted in Insurance

The basis for contractual insurance liability is actual consensus supported by the insureds’ and the insurers’ serious intention to be legally bound to what they have agreed to. There is no consensus if there is a material mistake relating to the identity of the parties to the insurance contract, or the object of the risk, … Continue reading

Offers of settlement and time-bars in insurance policies

By Donald Dinnie on January 8, 2020 Posted in Insurance

In South Africa, for example, under the Policyholder Protection Rules or the Short-term Ombud’s Rules the running of statutory prescription and time-bar limitation periods provided for in an insurance policy may be suspended while a dispute is resolved. German law also provides for some circumstances in which the limitation period in an insurance coverage dispute … Continue reading

When does a claim under a liability policy prescribe?

By Donald Dinnie on December 11, 2019 Posted in Insurance

A claim for indemnification under a liability insurance contract only arises when liability to a third party for a certain amount has been established. For purposes of prescription, the debt becomes due when the insured is under legal liability to pay a fixed and determined sum of money. Until then a ‘claim’ for indemnification under … Continue reading

Specific terms override general terms and insurers bound by agents (US)

By Patrick Bracher (ZA) on November 24, 2019 Posted in Insurance

The Washington Supreme Court found that an insurance company was bound by its agent’s written representations that a particular corporation was an additional insured under a policy even though the printed words in the certificate of insurance said the addition was not binding. A mobile telephone operator and a contractor together erected a cell phone … Continue reading

Medical malpractice: A USA birth injury comparison

By Donald Dinnie on November 19, 2019 Posted in Insurance

South African healthcare practitioners and insurers may take some comfort (on the basis that the grass is not greener) from the jury verdict of an Illinois, US Court in a medical malpractice claim against the West Suburban Medical Center and others. The jury awarded a record US$100.6 million damages against the hospital in respect of brain … Continue reading

Loss adjusters’ reports may not be privileged

By Donald Dinnie on November 15, 2019 Posted in Insurance

Loss Adjusters’ reports are only privileged where the reports are prepared in contemplation of litigation and for the purpose of seeking legal advice. But it is not every insurance claim where litigation is likely or reasonably anticipated. The sole or dominant purpose of the creation of the report need not be for the purposes of … Continue reading

The Big Read Book Series

By Donald Dinnie and Patrick Bracher (ZA) on November 3, 2019 Posted in Insurance

Norton Rose Fulbright’s insurance practice is excited to announce the launch of its Big Read Book Series with the publications of Volume 1 and 2 in the series. The series is part of the insurance practice’s contribution to resourcing the insurance industry. Volume 1 is a collection of South African insurance judgments of 2018. Volume … Continue reading

Loss of profits claim for damaged taxi (UK)

By Patrick Bracher (ZA) on October 27, 2019 Posted in Insurance

Where the vehicle of a professional driver such as a taxi driver is damaged in an accident caused by another party’s fault, there is a loss of profits claim while the vehicle is repaired or replaced which may be limited to mitigation costs. The following principles apply: The starting point is the loss of profits … Continue reading

Animals cannot commit vandalism and malicious mischief (US)

By Patrick Bracher (ZA) on October 14, 2019 Posted in Insurance

An insured sued under their Dwelling Policy for a substantial amount of damage that had been caused to their home by racoons which somehow entered the dwelling. They relied on the cover provided for ‘vandalism and malicious mischief’ which cannot be applied to animals, said the Pennsylvania court. Not surprisingly, the court found that ‘vandalism’ … Continue reading

Russian roulette is self-inflicted injury not suicide (US)

By Patrick Bracher (ZA) on October 8, 2019 Posted in Insurance

A Texas court held that the insurers did not have to pay the death claim for a teenager who died when he pulled the trigger of a revolver with the barrel in his mouth and one bullet in the cylinder killed him instantly, because it was excluded by the policy exclusion for death caused directly … Continue reading

Act of God defence fails

By Patrick Bracher (ZA) on September 25, 2019 Posted in Insurance

When Superstorm Sandy struck Staten Island off New York in October 2012, a dinner cruise boat docked in a marina sustained severe damage from the storm’s high winds and rain, ultimately sinking with a loss of $750 000. The operators of the marina were held liable to the insurer which had paid out more than $900 000 … Continue reading

Think twice before rejecting a Calderbank offer

By Natasha Naidoo on August 23, 2019 Posted in Insurance

In May 2019 the Bloemfontein High Court confirmed that a secret offer which is made by any party to a damages claim (including the plaintiff) to save costs will affect the costs order. Such an offer is known as a Calderbank offer with origins in English law and similar principles apply in the South African … Continue reading

Entire building cladding replaced despite only two sides damaged

By Patrick Bracher (ZA) on August 14, 2019 Posted in Insurance

A hailstorm physically damaged the aluminium cladding on the south and west sides of the insured building. The insurer was ordered to replace the cladding on all sides of the building because a matching cladding could not be found. It was held that the obligation to pay for “direct physical loss” to the “covered property” … Continue reading

Damages under insurance contract with reinstatement value conditions

By Patrick Bracher (ZA) on August 12, 2019 Posted in Insurance

Where an insurance policy included reinstatement value conditions and the insured had taken immediate steps to comply with the reinstatement conditions, the insured could rely on the clause as long as the insured was genuinely desirous of restarting the business but was unable to do so because of the insurer’s unjustifiable decision not to indemnify … Continue reading

Contribution between insurers (US)

By Patrick Bracher (ZA) on August 12, 2019 Posted in Insurance

When Empire Insurance Company paid the claim for losses sustained by a car hire company when the hirer crashed their Lamborghini, it sought to recover its outlay from Allstate Insurance who insured the driver who was responsible for damage to the vehicle under the rental contract. The court held that Allstate was not entitled to … Continue reading

A rare contribution case, and the pollution exclusion (US)

By Patrick Bracher (ZA) on July 30, 2019 Posted in Insurance

After the Zurich American Insurance Co (ZAIC) in Missouri, USA paid out a claim on wrongful death from asbestos exposure, it sought a contribution from Insurance Company of North America (INA). The claim for contribution failed because the INA policy had a pollution exclusion but the principles of contribution between insurers were discussed. The facts … Continue reading

War exclusion requires hostilities between sovereign states (US)

By Patrick Bracher (ZA) on July 23, 2019 Posted in Insurance

A Californian court of appeals found that war exclusions which exclude coverage for expenses resulting from “war” or “warlike action by a military force” require hostilities between de jure or de facto governments (governments or entities essentially like governments). The insured was a film company producing a television series in Jerusalem when Hamas fired rockets … Continue reading

Cyber cover must be specifically provided or excluded (Lloyd’s)

By Patrick Bracher (ZA) on July 23, 2019 Posted in Insurance

Lloyd’s of London requires its insurers to exclude or provide affirmative cover for cyber risks. Insurers connected to Lloyd’s must make sure they do not have unintended exposure to cyber risk. From the beginning of 2020 underwriters are required to ensure that their property damage policies specifically affirm or exclude cyber cover. This applies to … Continue reading

Bin with wheels is not a ‘vehicle’ (US)

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

A New York Appeals Court unsurprisingly found that a recycling bin with wheels, which ruptured a gas line used by residents of an apartment building, is not a ‘vehicle’. An all risks policy exclusion did not apply if there was ‘direct loss causing physical damage to covered property from vehicles’. The court said that not … Continue reading

Principal debtor can rectify guarantee between guarantor & beneficiary

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

The Western Cape High Court held that the principal debtor (in this case the contractor under a building contract) can apply to court to rectify a guarantee between the guarantor (an insurer) and the beneficiary under the guarantee (the employer) where the contractor had given a counter indemnity to the insurer. A guarantee contract is … Continue reading

Cyber insurance and the war exclusion

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

Cyber insurers should note the debate going on in London regarding reform of the war exclusion clause in cyber insurance. The perpetrators of cyber incidents are often untraceable and it is difficult to ascertain whether they constitute state-sponsored acts of war subject to the war exclusion clause. There is at least one pending action where … Continue reading

Prescription under performance bond commences on demand

By Patrick Bracher (ZA) on July 10, 2019 Posted in Insurance

Where an insurer provided a performance bond/guarantee in which it undertook to pay ‘on receipt of a written notice from the seller’ saying that the purchaser had defaulted, it was held that extinctive prescription only started to run when demand for payment was made even though three years had passed since the default event. The … Continue reading

No claim for blowtorch-damaged jewellery: care, custody or control exclusion (US)

By Patrick Bracher (ZA) on July 10, 2019 Posted in Insurance

A New Jersey appeals court refused to grant cover for a loss of $4 million worth of opals ruined inside a safe that had to be opened with a blowtorch. The claim was made against the company that sold the safe and were involved in the day long effort to get the safe opened when it … Continue reading