Topic: Insurance

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True brokers may be paid a secret commission (UK)

In negotiations between parties who were negotiating charterparty terms for the chartering of two vessels, third parties involved in the negotiations received commission unknown to the party paying the price for the charter of the two vessels. It was held that although the third parties were intermediaries they were not agents in the full legal … Continue reading

New York state financial regulator warns of cyber risk

In April 2021 the New York State Department of Financial Services issued a Report on the SolarWinds Cyber Espionage Attack and Institutions’ Response warning that the next great financial crisis could come from a cyberattack because with each passing day our world gets more interconnected. The report ends with the following passage: “The SolarWinds Attack … Continue reading

Covid-19 insurance claims and physical loss (US)

Another American court in G & A Family Enterprises, LLC d/b/a Smokin’ Pig BBQ & Others v American Family Insurance Company 1: 20-CV-03912-JPB has held that State-imposed Covid-19 restrictions do not qualify as a “direct physical loss” under the insurance policy held by the insureds. The court held that while the phrase “direct physical loss” … Continue reading

The payment of medico-legal damages in services not money

The problem facing departments of health around the country is how to improve service delivery to the public and the quality of medical care provided to patients and so significantly reduce the number and quantum of medico-legal claims. Instead of funding healthcare programmes and facilities, a large portion of the annual budgets is allocated to … Continue reading

Insurance fraud and fraud clauses

The Supreme Court of Appeal in an April 2021 judgment dealt with the interpretation and  application of a fraud clause found in the policy.. The clause read: “If you, or anyone acting on your behalf submits a claim, or any information or documentation relating to a claim, that is in any way fraudulent, dishonest or … Continue reading

Excess reinsurances and the applicable jurisdiction regime

The United Kingdom High Court in the judgment of 13 April 2021 granted the excess reinsurer’s UK interim anti-suit injunction in respect of the insurer/defendants’ claims in South Africa under the excess reinsurance agreements.  Those claims in the English courts to the exclusion of the South African courts will represent the bulk of the defendants’ claims … Continue reading

Covid-19 claim rejected because of virus exception (US)

A Kentucky US district court rejected the business interruption insurance claim of a retail business specialising in sale of outdoor sportswear and equipment for losses suffered as a result of government restrictions following the outbreak of Covid-19. The all-risks policy covered physical loss and damage but excluded damage caused directly or indirectly regardless of any … Continue reading

Insurance policies and absolute and relative warranties

In South African insurance law a warranty is usually a condition precedent to inception or continuation of cover or payment of a claim.  The consequence of breach or non-fulfilment is that there is no obligation on the insurer to indemnify the insured. Warranties may be absolute or relative. An obligation requiring that a certain state … Continue reading

Business Interruption Insurance and the absence of Damage

A claim under a business interruption policy generally requires a valid claim under the material damage section of the policy.  And the damage must occur during the currency of the policy. In TKC London Limited v Allianz Insurance PLC [2020] EWHC 27 10 (Comm.), the insured operated a café in London.  Following the Covid-19 outbreak of … Continue reading

Policy interpretation – “interruption”

The United Kingdom Supreme Court, in the FCA Test case appeal, dealt with the meaning of “interruption” in a Business Interruption policy. The policy wording required there to be losses resulting from “an interruption to your activities…” The court held that the ordinary meaning of “interruption” is quite capable of encompassing interference or disruption which … Continue reading

Subrogated claim against fire-causing students rejected because students were insureds (US)

The insurer was denied the right to sue two former college students for $4.5 million the insurer had paid to the school after the students accidentally set fire to the dormitory.  It was held that the students accommodated in dormitories were equivalent to tenants and insured under the school’s fire policy. The two students used a … Continue reading

Policy interpretation – prevention of access

The United Kingdom Supreme Court in the FCA Test Case appeal dealt with the meaning of “prevention of access” in respect of the prevention of access due to the actions or advice of the local authority because of an emergency which is likely to endanger life or property in a Business Interruption policy. The relevant … Continue reading

Policy interpretation – “inability to use”

The FCA Test Case appeal in the UK Supreme Court dealt with the meaning of “inability to use” business premises in the relevant non-damage extensions to the business interruption section of the policy considered by the court. The relevant non- damage Public Authority clauses did not cover all business interruption due to “restrictions imposed” by … Continue reading

124 food poisoning claims is one ‘occurrence’ (US)

A Texas district court held that 124 claims for food poisoning from salmonella bacteria suffered by patrons at a restaurant was one ‘occurrence’ within the terms of the restaurant’s insurance policy. An occurrence was defined as ‘an accident including continuous or repeated exposure to the same general harmful conditions’. An occurrence was ‘an accident’ and … Continue reading

Claim for loss of use of building precluded by ‘impaired property’ exclusion (US)

A conveyor company failed in its claim against its insurers for a loss arising from the supply of a defective cookie packaging machine to a biscuit manufacturer because the policy specifically excluded coverage for “impaired property”.  The claim by the biscuit manufacturer against the insured alleged that they were unable to use their new building … Continue reading

New York regulator issues a cyber-insurance risk framework

Concerned about pandemic-related extra cyber activity, the rise in ransomware and recent cyber-espionage campaigns, the New York State Department of Financial Services (DFS) issued a cyber-insurance risk framework on 4 February 2021. After describing the risks for insurers and concluding that insurers play a critical role in mitigating and reducing the risks of cyber-crime, the … Continue reading

Interpreting insurance contracts (part 7 – causation)

An insured loss must be caused legally and factually by the insured peril. Even where factual causation is established legal causation does not automatically follow. In Concord Insurance Co Limited v Oelofsen N.O. (1992) the court said that in the contractual context policy considerations do not enter the enquiry (unlike in criminal law or delict, … Continue reading
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