Topic: Insurance

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

Evidence of sudden and accidental pollution rejected (US)

By Patrick Bracher (ZA) on July 3, 2019 Posted in Insurance

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

By Patrick Bracher (ZA) on June 18, 2019 Posted in Insurance

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

By Claudia Eisenberg Jackson on May 7, 2019 Posted in Insurance

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?

By Natasha Naidoo and Patrick Bracher (ZA) on May 7, 2019 Posted in Insurance

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

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

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

Use of a vehicle includes a passenger opening a car door

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

Extraordinarily, a case involving a passenger opening a car door and scratching a neighbouring vehicle in a supermarket carpark led to a decision before the Court of Justice of the European Union. Europe’s highest court found that this is ‘use of vehicles’ for the purposes of motor vehicle insurance. The event happened in Latvia where … Continue reading

Contractual claim not covered under liability policy (US)

By Patrick Bracher (ZA) on April 4, 2019 Posted in Insurance

Where the purchaser of an oil refinery sued the seller for breach of contract for $25 million damages resulting from a fire caused by various acts and omissions of the seller prior to the sale, the claim was not covered under the seller’s commercial general liability policy. The claim was not based on property damage but … Continue reading

Insurers’ role in losses caused by malfunctioning technology

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

One of the major issues facing the law in an age of autonomous technology is the question of who is liable for damage caused by a machine or artificial intelligence either by physical injury or the failure of a contract. Insurers will have a major role to play. If a machine such as a driverless … Continue reading

Fraud as a defence to payment under a guarantee

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

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