Topic: Insurance

Competition Commission proposes tough measures on motor insurers

By Mark Griffiths on August 26, 2018 Posted in Insurance

On 1 August 2018, the Competition Commission called for final comments on its far-reaching Code of Conduct for Competition in the Automotive Industry. The code will materially impact a range of stakeholders, including motor insurers. This consultation is the last opportunity for stakeholders to comment before they decide whether or not to sign up to … Continue reading

Wrongful death claims at bar fails on assault exclusion (US)

By Sandra Sithole (ZA) on August 6, 2018 Posted in Insurance

Two US district courts in two separate cases held in July 2018 that the insurers of public bars do not have a duty to defend or indemnify the insured owners of the bars for violent deaths of patrons because of the policy exclusion for bodily injury arising from an assault, battery or physical altercation. The … Continue reading

Hiring a sexual offender who causes harm is an insured ‘accident’ (US)

By Patrick Bracher (ZA) on July 30, 2018 Posted in Insurance

The California Supreme Court held that the negligent hiring, retention and supervision of an employee who sexually abused a 13-year old at a school where he was working was an ‘accident’ for the purposes of a general liability policy. In Californian law an accident is ‘an unexpected, unforeseen, or undesigned happening or consequence from either … Continue reading

Carbon monoxide death liability claim fails on pollution exclusion (US)

By Yash Naidoo on July 24, 2018 Posted in Insurance

Two tenants of a second-floor unit in an apartment building (condominium) in Florida USA died in their bedroom, after inhaling carbon monoxide gas whilst asleep. The gas was believed to have come from a car in the unit’s garage. It seeped into the air-conditioning system of the unit and entered the bedroom through the system’s … Continue reading

US court refuses ‘collapse’ cover for decayed building

By Patrick Bracher (ZA) on July 24, 2018 Posted in Insurance

A Federal Appeals Court in the US has refused to grant cover for alleged ‘collapse’ of a building which was insured under a property policy. The building in question had some decayed framing but the framing as a whole was sufficient to support the weight and loads imposed. The court held that the word ‘collapse’ … Continue reading

Proof of online questions in insurance application

By Patrick Bracher (ZA) on July 23, 2018 Posted in Insurance

Insurers could not reject liability on the basis that the insured had deliberately or recklessly misrepresented his address when applying for insurance because there was no clear evidence about the precise wording of the questions which appeared on the computer screen at the time the online application was made. Computer websites allowed the consumer to … Continue reading

Accidental damage occurs by chance and is not deliberate or inevitable

By Patrick Bracher (ZA) on July 23, 2018 Posted in Insurance

The UK high court refused to order insurers to indemnify Leeds Beckett University for the loss of a building which cracked and was subsequently demolished in 2011 because the damage was not accidental. The below-ground blockwork had turned into mush as a result of flowing ground water which the evidence revealed was there at the … Continue reading

Insurance – Is a stationary tractor spraying herbicide being used?

By Patrick Bracher (ZA) on July 17, 2018 Posted in Insurance

This insurance dispute went all the way to the Court of Justice of the European Union which found that the phrase ‘use of vehicles’ in EU law covered any use of a vehicle as a means of transport. The fact that a vehicle is stationary when the accident occurs does not itself preclude the use … Continue reading

Disintegrating foundations caused by flowing water is gradual deterioration

By Patrick Bracher (ZA) on July 10, 2018 Posted in Insurance

A policy exclusion for damage caused by ‘gradual deterioration’ was held to exclude cover where a building had to be demolished by reason of foundations which disintegrated from flowing water. The building was built across a line of an old watercourse with seven natural springs in the vicinity and there was no proper drainage design. … Continue reading

Alleged costs to avert business interruption loss rejected (US)

By Patrick Bracher (ZA) on June 26, 2018 Posted in Insurance

In July 2012 a fire damaged equipment vital to the production of a steel pipe manufacturing plant in Arkansas. The fire was a covered peril and loss of business income and extra expenses were also covered. The court rejected the insured’s claim for an additional $14 million in mitigation costs incurred allegedly as ‘necessary expenses’ in … Continue reading

Recoverable car hire charges while vehicle repaired (UK)

By Patrick Bracher (ZA) on June 26, 2018 Posted in Insurance

When a car is hired whilst a vehicle damaged in an accident is being repaired the claimant is only entitled to the lowest reasonable basic hire rate of a reputable local car hire company. The cost of the collision damage waiver is also allowed. The plaintiff’s Jaguar XJ Supersport V8 was damaged in an accident … Continue reading

Action over stolen trade secrets does not fall under defamation cover (US)

By Patrick Bracher (ZA) on June 20, 2018 Posted in Insurance

A US company was sued for misappropriating trade secrets relating to a medical device and poaching a number of employees. The company was insured in terms of an advertising and personal injury section of its commercial general liability policy, and it attempted to allege that there was a claim for implicit defamation obliging the insurers … Continue reading

All-Risks policy does not cover non-existent cargo

By Patrick Bracher (ZA) on June 19, 2018 Posted in Insurance

The English High Court held that an all-risks marine cargo and storage insurance policy did not cover a loss of copper ingots which were never shipped to the claimant who had in good faith paid for and taken up fraudulent bills of lading. The claimant bought 7 000mt of copper ingots for shipment to China. The … Continue reading

Asbestos exclusion upheld in US

By Patrick Bracher (ZA) on June 19, 2018 Posted in Insurance

An exclusion for claims ‘arising out of asbestos’ was upheld by the US Third Circuit because it is unambiguous and therefore enforceable. The Appeal Court overturned a $36 million judgment against the insurer, which is only part of the policyholder’s liability for $120 million worth of asbestos-related claims. The court did not accept the argument that the … Continue reading

Is continuing to use ship’s engine after alarm accidental loss? (Aus)

By Patrick Bracher (ZA) on June 11, 2018 Posted in Insurance

The insured pleasure craft was fitted with a diagnostic system and a critical alarm for low oil pressure or high coolant temperature. When the alarm went off the engines automatically went into limp mode and the engine-operating manual required the engine to be switched off. The insured did not read the manual nor switch off … Continue reading

Exclusion of loss arising from arrest, restraint, detainment

By Patrick Bracher (ZA) on June 4, 2018 Posted in Insurance

The UK Supreme Court examined the question whether a vessel detained in Venezuela as a result of being used by a drug cartel to smuggle cocaine strapped to the hull fell within the exclusion for ‘arrest, restraint, detainment, confiscation or expropriation … by reason of infringement of any customs … regulations’. The owners of the … Continue reading

Insurers do not have to indemnify lawyer for overbilling claim (US)

By Patrick Bracher (ZA) on May 31, 2018 Posted in Insurance

A property foreclosure attorney was sued in a class action for overbilling a group of property owners. The lawyer sued his PI insurers to oblige them to defend him against the class action. He lost. The court found that the policy did not create a duty to defend because the allegations had arisen from billing … Continue reading

Cocaine planted on ship by smugglers not an insured ‘malicious act’ (UK)

By Patrick Bracher (ZA) on May 27, 2018 Posted in Insurance

Unknown third parties strapped bags of cocaine to the hull of a vessel leaving Venezuela resulting in the detention of the ship for more than six months and therefore a constructive total loss. The UK Supreme Court ruled that the loss did not result from ‘any person acting maliciously’. In the context of a clause … Continue reading

Additional insureds you have agreed to insure (US)

By Patrick Bracher (ZA) on May 27, 2018 Posted in Insurance

A US construction insurance policy included provision for an additional liability insured as ‘any person or organisation with whom you have agreed to add as an additional insured by written contract’. It was held the policy did not cover a project architect with whom there was no such direct written contract. Because the endorsement included … Continue reading

Application of insolvency exclusion (UK)

By Patrick Bracher (ZA) on May 22, 2018 Posted in Insurance

Where a professional indemnity policy excluded claims ‘arising out of or related directly or indirectly to the insolvency of the insured’ the court absolved the insurer from liability in a claim by a financial management company that had lost money on a £200 000 investment when the issuer of a bond went insolvent. The court held … Continue reading

Settlement not authorised by insurers is not an occurrence (Australian case)

By Patrick Bracher (ZA) on May 14, 2018 Posted in Insurance

A refurbishment contract entered into by the insured led to arbitration which the insured settled without the insurer’s authority on the basis of a ‘cap and collar’, capping the award if the claimant was successful and agreeing to a payment of USD2 million if the claim failed. The claim failed and the insured claimed the USD2 million … Continue reading

Insurance of ‘damages’ does not include statutory penalties (US)

By Patrick Bracher (ZA) on May 14, 2018 Posted in Insurance

The insured failed in an attempt to get an indemnity under a liability policy covering ‘damages’ for statutory damages sought by the Federal Trade Commission. The insured had made telephone calls in breach of the Telephone Consumer Protection Act (TCPA) to numbers on the National Do Not Call Registry. The FTC asked for statutory damages … Continue reading

Ambiguous limits of indemnity (UK)

By Patrick Bracher (ZA) on May 13, 2018 Posted in Insurance

Where a policy schedule and the wording of the policy were not on the face of it consistent, the court considered the combined effect of the limit for a single claim and a number of linked claims and held that the same £10 million applied to both. According to the schedule, the limit of indemnity for … Continue reading

Minority shareholder who dominated board held to control a company

By Patrick Bracher (ZA) on May 1, 2018 Posted in Insurance

A court, asked to dismiss a claim against Tesla Motors, found it reasonably conceivable that Elon Musk, a 22.1% shareholder, was a controlling shareholder because of his ‘actual domination and control over the directors’ wielding more power than may be evidenced by the minority shareholding. Normally the courts of Delaware, where the case happened, would … Continue reading