Topic: Insurance

The effect of legalisation of cannabis on the insurance industry

By Natasha Naidoo on January 21, 2019 Posted in Insurance

The legalization of private cultivation, possession and the use of cannabis in South Africa has had the effect of changing the law which will undoubtedly require transformation in the insurance industry. The Constitutional Court in Minister of Justice and Constitutional Development and Others v Prince (and others) has given Parliament 24 months to amend current … Continue reading

Consider your verdict: Does motor insurer pay for fire caused while immobilised vehicle being repaired?

By Patrick Bracher (ZA) on December 15, 2018 Posted in Insurance

Here is a nice exercise for you. The UK Supreme Court has heard argument and will soon be giving judgment on the question whether a UK motor policy extends to liability for damage to the property of third parties because of fire caused by repair work to the car when it is immobilised. A mechanic … Continue reading

Bad subcontractor work not an ‘accident’ – Ohio USA

By Patrick Bracher (ZA) on December 7, 2018 Posted in Insurance

Ohio’s high court has held that damage from a subcontractor’s faulty work is not fortuitous in the context of a commercial general liability policy which covered an ‘occurrence’ meaning an ‘accident, including continuous or repeated exposure to substantially the same general harmful conditions’ causing property damage including physical injury to or destruction of tangible property. … Continue reading

Cyber breach claim fails under GLP because information not ‘published’ (US)

By Patrick Bracher (ZA) on December 2, 2018 Posted in Insurance

A Florida court held that the insurer had no duty to defend a hotel operator’s information technology subsidiary against allegations that it was responsible for a hacking incident that exposed hotel customers’ credit card data because, under the general liability policy, there was no ‘making known to any person or organisation covered material that violates … Continue reading

Definition of ‘explosion’ cover in breakdown policy excludes liability

By Patrick Bracher (ZA) on December 2, 2018 Posted in Insurance

A refining company claimed under its equipment breakdown insurance policy following an explosion that occurred when a segment of a pipe in a charge heater designed to refine the petroleum product naphtha burst. A 600 degree naphtha mixture was running through the pipe at more than 14 000 pounds per hour and, when the charge heater … Continue reading

Enforceability of the sanctions exception in policies (UK)

By Patrick Bracher (ZA) on November 25, 2018 Posted in Insurance

An awaited decision on the enforceability of the sanctions provision in policies of insurance heard in the UK courts has turned out to be of not much general assistance. The English High Court found that, although an insurer is not liable to pay a claim where the payment would be prohibited under EU or US … Continue reading

Bitcoin held to be property not money for insurance policy (US)

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

A court in Ohio found that bitcoin is covered ‘property’ under a homeowner’s policy and not ‘money’ and therefore the claim for lost bitcoin was not limited by the money sublimit. The decision was based partly on a recent Internal Revenue Service document that categorised virtual currency such as bitcoin as property for federal tax … Continue reading

PI policy cannot be ceded to third party

By Patrick Bracher (ZA) on November 12, 2018 Posted in Insurance

The professional indemnity policy issued by the Attorneys Insurance Indemnity Fund is incapable of cession to a third party. A purported cession to the client of a law firm who had lost misappropriated trust funds was declared invalid by the Supreme Court of Appeal. Contracts can be ceded to third parties if there is no … Continue reading

Insurer entitled to rely on third party expert’s conclusions (US)

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

A Delaware court held that a property insurer did not breach its policy issued to a farm when it refused to cover the collapse of a chicken coop during a blizzard because it justifiably relied on expert reports indicating that the destruction was caused by snow and faulty construction which were exclusions under the policy. … Continue reading

Defiance of law: the collateral challenge defence by Namibian insurers

By Ian Petherbridge on October 16, 2018 Posted in Insurance

Under the correct set of circumstances a party may treat an administrative act as void and await developments, which must not be ‘equated with contumacious disregard for the law by anarchists and legal delinquents’, according to a judgment of the Namibia High Court The judgment stayed the implementation and application of the provisions of the … Continue reading

‘Fraudulent devices’

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

The English Supreme Court had the following to say regarding the standard insurance policy fraud clause which excludes liability if the insured makes a claim ‘by fraudulent devices’. The court said: ‘The expression is borrowed from a standard clause avoiding contracts of fire insurance which was widely used in the 19th and early 20th Centuries. … Continue reading

Strip club not covered for credit card theft by employees (US)

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

In August 2018, a US federal court ruled that an insurer did not have to cover a strip club for third party reimbursement costs arising from credit card fraud on its customers by the club’s employees because no direct loss was suffered by the club itself. The insured, a club owner, was the holder of … Continue reading

Damage arising from marijuana operations not covered by policy (US)

By Sandra Sithole (ZA) on September 3, 2018 Posted in Insurance

A US appeals court in August 2018 found that an insurer does not have to indemnify its insured for damage to a warehouse by tenants who converted it into a marijuana growing operation, finding that an exclusion in the policy for losses resulting from criminal acts precluded cover. The claim arose under the building and … Continue reading

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