Topic: Insurance

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Think twice before rejecting a Calderbank offer

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

Damages under insurance contract with reinstatement value conditions

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)

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

War exclusion requires hostilities between sovereign states (US)

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)

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)

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

Cyber insurance and the war exclusion

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

Evidence of sudden and accidental pollution rejected (US)

A corporation which operated two industrial sites found significant amounts of ground water contamination. Its attempt to get insurance cover on the basis that the pollution was sudden and accidental was unsuccessful because the evidence of its expert was rejected as not being based on sound methodology. The pollution exclusion therefore defeated the claim. On … Continue reading

Cyber risk warnings for insurers

The cautionary warnings continue for insurers regarding the cyber risks that they underwrite. Although cybersure is seen as one of the major opportunities for the insurance industry, there are a number of risks including the increasing frequency of cyberattacks, the difficulty in pricing for the risks, and the fact that existing policies, including liability and … Continue reading

Guidance on conducting insurance business in terms of section 5 of the Insurance Act

Section 5(1) of the Insurance Act 2017 prohibits any person from conducting insurance (including reinsurance) business in South Africa unless licensed under the Act. Under section 5(2), a foreign re/insurer will be regarded as conducting insurance business in South Africa if that foreign re/insurer, or another person on its behalf, directly acts in South in … Continue reading

What’s on the horizon for the insurance industry in 2019?

Our lawyers across ten jurisdictions have created a guide detailing the top legal concerns for insurers from various regions. Some developments are concerns only in a specific market while other topics appear to be common across several jurisdictions. Increasing focus on personal accountability, greater oversight of distribution chains and the protection of customer interests and … Continue reading

Difference between advice and information provided by a professional (for example a broker) – English law

English law relating to professional negligence draws an interesting distinction between whether the professional person is giving information or giving advice. This is not specifically part of South African law but it is relevant when considering liability, for instance, of brokers under the FAIS Act. The difference is between providing information for the purpose of … Continue reading

Fraud as a defence to payment under a guarantee

The guarantor in Raubex Construction (Pty) Ltd v Bryte Insurance Company alleged that payment under a guarantee was not due because of fraud on the part of the beneficiary. A mere error, misunderstanding or oversight, however unreasonable, does not amount to fraud and is insufficient to show that the contentions of the beneficiary are deliberately … Continue reading

Insurance regulation in 20 Asia Pacific countries

In January 2019, Norton Rose Fulbright published ‘Ten things to know’ about insurance regulation in 20 Asia Pacific countries. The guide is hosted on our free subscription premium content site, the Institute, as an interactive map featuring the 20 jurisdictions. It covers the following countries for those interested in investing or doing business with insurers … Continue reading

CyRiM warns of up to $193 billion cyber risk – Insurers beware!

The Cyber Risk Management (CyRiM) Report 2019 shows that the economic damage to the world from a concerted global cyber-attack propagated by malicious email could range between $85 billion (least severe) to $193 billion (most severe). Retail at least could suffer the highest total economic loss globally ($15 billion), followed by healthcare ($10 billion) and manufacturing ($9 billion). It … Continue reading

Power station damaged by shocked squirrel is excluded

Where a squirrel found its way onto a power station’s electrical transformer triggering an electrical arc that killed the squirrel and caused damage to the municipality’s property of $213 524, the court denied the municipality all-risks insurance cover because of an exclusion for ‘loss caused by arcing or by electrical currents other than lightning’. The court … Continue reading
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