Topic: Insurance

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Being a FAIS key individual is not an ‘easy gig’

In a December 2023 decision the Financial Services Tribunal upheld the debarment of the key individual of a fund of funds investment vehicle, Stringfellow Investments, on the grounds of his material failure to perform his oversight and management role in relation to the financial services provider as prescribed in the FAIS Act. A key individual … Continue reading

UK brokers call for a regulatory environment to facilitate growth

The British Insurance Brokers’ Association (BIBA) has issued its 2024 manifesto dealing with wide-ranging issues affecting brokers in the UK and calls on the UK Financial Conduct Authority to create and oversee a regulatory environment that encourages growth and competitiveness. An international survey of the direct cost of regulation across jurisdictions found that, as a … Continue reading

Special rules for professional negligence claims against legal practitioners will affect PI insurers

The new rules laid down by the Constitutional Court in December 2023, which will extend the three year prescription period for claims against legal practitioners in many cases (see our blog here), will have to be considered by professional indemnity insurers. Prescription will only start running once the client knows that the advice was incorrect … Continue reading

Special extinctive prescription provisions for professional negligence claims against legal practitioners

In December 2023 the Constitutional Court held that where a client sues their legal practitioner for losses suffered as a result of professional negligence, the knowledge of the facts which give rise to the commencement of running of the three year prescription period may include knowledge of the legal conclusion that the advice was incorrect. … Continue reading

Project co-insureds beware- cover may be limited

An April 2023 judgment of the English Court of Appeal has confirmed that under English law the scope of cover available to a party identified as a co-insured may be more limited than the cover available to the principal insured.  The co-insured is at risk of facing a subrogated claim from the insurer where it … Continue reading

Subcontractor’s defective workmanship may be an ‘accident’ and therefore an insured occurrence (US)

In November 2023 the Supreme Court of Illinois held that construction defects caused by a subcontractor using defective materials, conducting faulty workmanship, and failing to comply with building codes causing defects in a residential townhome development is an “accident” under the policy and therefore an “occurrence”. There are lessons to be learned. The commercial general … Continue reading

Certification of class actions and triable issue

This recent High Court judgment warns that class action certification is not there for the mere asking. The lengthy 125-page judgment canvases issues such as the suitability of the class representatives, commonality, funding arrangements, litigation funders, contingency fees and whether there exists a cause of action raised on a triable issue. It is worth a … Continue reading

The War Exclusion & Proximate Cause (UK)

In this court of appeal judgment, the court upheld the findings of the lower court discussed here. The question was whether loss or damage caused in 2021 by the controlled detonation of a previously undiscovered World War II bomb was “occasioned by war” and excluded by the applicable insurance policy. Damage had been suffered to … Continue reading

United Kingdom HM Treasury adds South Africa to its list of “High-Risk Third Countries”

This blog was co-authored by Michael McCarthy, Candidate Attorney. In November 2023 the Financial Action Task Force issued a Follow-up Report and Technical Compliance Re-Rating outlining the progress South Africa has made to address identified anti-money laundering and counter-terrorist financing deficiencies. The report highlights that while progress has been made to address most technical compliance … Continue reading

US court says no distinction between managerial and non-managerial duties of directors

On 31 August 2023 the Supreme Court of Maryland held (overruling a previous decision) that there is no distinction between the ‘managerial’ and ‘non-managerial’ duties of directors of a Maryland corporation and said that the “sole source of the duties of the director is found in section 2-401.1 of the Maryland General Corporation Law (MGCL) which places … Continue reading

Prescription of a contractual claim not delayed by a suspensive condition

The full bench of an appeal court in the Pretoria High Court held that the claimant’s claim had prescribed three years after the contract was entered into despite there being a suspensive condition which has not fulfilled till four months after the agreement was entered into. Contracts with suspensive conditions should therefore specifically deal with … Continue reading

Builder’s risk insurance: Perils exclusion (USA) – Part 3

In this judgment considered here and here the policy under consideration included an Extension which deleted the previous Perils Excluded wording and replaced it with: “All costs rendered necessary by defects of material workmanship, design, plan or specification and should damage (which for the purposes of this exclusion shall include any patent detrimental change in … Continue reading

Builder’s risk insurance: Is honeycombing of concrete ‘damage’? (USA) – Part 2

In this judgment, discussed in part 1 here the insurer in rejecting the claim argued that the insured property had to be altered, not merely defectively constructed, in order to constitute “physical loss” or “damage”.  The insurer argued that the insured property was not altered because the honeycombed concrete components were defective from the time … Continue reading

Ride-hailing driver using rented vehicle insurance excluded as “regular use” vehicle (US)

In November 2023 a Michigan Court of Appeals denied coverage to a ride-hailing driver whose rented vehicle was rear-ended whilst carrying a passenger for reward because the Under-Insured Motorist (“UIM”) benefits under the insurer’s policy excluded benefits for bodily injury sustained by any person when using “any vehicle that is owned by or available for … Continue reading

Marijuana growers fire insurance claim rejected for lack of sprinklers (US)

In November 2023 a Michigan Court of Appeals rejected a fire claim by a marijuana growing operation, under a commercial property insurance policy against fire and other hazards, because the policy unambiguously required an automatic extinguishing system described in the policy as including sprinklers and discharge nozzles and related equipment. The policy included a Protective … Continue reading

Motor vehicle insurance and proof of quantum

In this appeal judgment, the court dealt with an insurance claim in which the insured’s motor vehicle was written off in a collision. The insured claimed damages in his summons based on the market-related value of the vehicle. The issue on appeal was whether the insured had produced evidence that supported his pleaded case on … Continue reading

Cyber risk modelling alone will not narrow the protection gap for peak cyber perils

Every insurer needs to read the research summary ‘Cyber Risk Accumulation: Fully tackling the insurability challenge’ issued by The Geneva Association in November 2023. Even though prudent insurance companies underwrite cyber risk with tightly-defined contract wordings, limited risk-absorbing capacity and requirements for risk management by the insured, this is not enough having regard to the … Continue reading