Topic: Insurance

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Competition Commission proposes tough measures on motor insurers

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

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

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

Proof of online questions in insurance application

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

Asbestos exclusion upheld in US

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

Additional insureds you have agreed to insure (US)

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)

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)

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

Ambiguous limits of indemnity (UK)

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

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
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