Tag archives: Insurance

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

Policyholder can assign benefits without consent

By Patrick Bracher (ZA) on March 16, 2016 Posted in Insurance

A Florida appeals court held that a homeowner could assign the benefits under her insurance policy to an emergency water mitigation company without the insurer’s consent. According to the property policy “assignment of this policy will not be valid unless we give our written consent.” After the insured house was flooded the policyholder hired the … Continue reading

Insurers proving material non-disclosure

By Donald Dinnie on September 4, 2015 Posted in Insurance

An insurer who wants to avoid a policy must prove a material non-disclosure by the insured on a balance of probabilities. That is normally done by way of leading oral evidence and the process of cross-examination. It is unusual, although not unheard of, for oral evidence to be dispensed with and questions of non-disclosure to … Continue reading

Fracking and insurance

By Donald Dinnie on March 16, 2015 Posted in Insurance

Insurers considering providing cover for hydraulic fracturing (fracking) should bear in mind the unique features of fracking which present both risks and opportunities. South African insurers have the benefit of experience from the United States for the pricing and limiting of risks. Fracking may pose risks which are not present in conventional drilling methods. More … Continue reading

House owners insurance: Cost of rebuilding on the original site

By Patrick Bracher (ZA) on February 23, 2015 Posted in Insurance

A New Zealand court discussed the question whether the right of an insured to an indemnity on the basis of the ‘cost of rebuilding on the original site’ has any meaning where it is not possible to build on that site because it had been devastated by an earthquake. In these circumstances, the notional full … Continue reading

The disclosure test is in the insurance act

By Nadia Gamieldien on February 16, 2015 Posted in Insurance

Section 59 of the Long-term Insurance Act and section 53 of the Short-term Insurance Act deal with misrepresentation and non-disclosure. The supreme court of appeal’s judgment in Visser v 1 Life Direct Insurance Limited correctly founded the entitlement of an insurer to reject a claim on statute. The insurance acts say that a policy cannot … Continue reading

Intent is key to fidelity claim – US judgment

By Patrick Bracher (ZA) on February 16, 2015 Posted in Insurance

A New York appeals court referred a matter to trial on the issue whether a bank could seek coverage under a fidelity bond issued by an insurer for losses, after the bank’s employee mishandled a $20 million loan to a developer. The relevant issue is the employee’s intent. There would have to be evidence that the … Continue reading

Power outage is not direct physical loss or damage (USA case)

By Patrick Bracher (ZA) on February 11, 2015 Posted in Insurance

In a case arising from Superstorm Sandy in north eastern USA, the plaintiff lawyers claimed a business interruption loss from its property insurance company because the electricity company’s decision to shut down certain electrical services to prevent damage meant they could not enter their building for days. The court found this did not amount to … Continue reading

Russian sanctions could affect reinsurance

By Patrick Bracher (ZA) on February 9, 2015 Posted in Insurance

Insurers must remember that jurisdictions in which the world’s major insurers operate such as the EU, Switzerland and the USA have imposed sanctions against Russia. Russian corporations and shareholders may be named on a sanctions list which will affect the enforceability of any reinsurance of a policy where a listed person is indemnified. There are … Continue reading

Joan Rivers’ daughter claims compensation after alleged medical malpractice: wrongful death actions

By Jay Page and Yasin Chetty on February 4, 2015 Posted in Insurance

Melissa Rivers, the daughter of the late Fashion Police star, Joan Rivers, is reportedly instituting a wrongful death claim against the medical practitioners who treated her mom prior to her death in September 2014. A wrongful death claim can be instituted in South Africa based on negligence which results in death, although this is not … Continue reading

Two US lessons for insurers for intentional harm claims

By Patrick Bracher (ZA) on February 4, 2015 Posted in Insurance

A New York appeals court refused to allow insurers to invoke a dishonest acts exclusion to avoid a bank’s claim for the indemnity of a $200 million fine paid to regulators. The clause read “This policy shall not apply to any claim made against the insured based upon or arising out of any deliberate, dishonest, fraudulent … Continue reading

Right to intermediary commission

By Patrick Bracher (ZA) on January 28, 2015 Posted in Insurance

The Retail Distribution Review has reminded us that in 2010 the appeal court in Maree v Chris Booysen t/a NVM Beleggings & Versekeringsadviseurs found that the long-term intermediary was not entitled to an advice fee. Earnings were restricted to a fee for services as intermediary under the Long-term Insurance Act. The matter went through three … Continue reading

Ten things to know about the governance and risk management framework for insurers

By Christine Rodrigues on January 21, 2015 Posted in Insurance

1. The Governance and Risk Management Framework takes effect on 1 April 2015. 2. A governance framework must be adopted by insurers to ensure the prudent management and oversight of their insurance business. The governance framework must be proportionate to the nature, scale and complexity of the insurer’s business. The governance framework applies to both … Continue reading

Insurance coverage for bullying

By Donald Dinnie on January 7, 2015 Posted in Insurance

An insurer was required by a Canadian court to provide an indemnity under a comprehensive homeowner’s property and liability insurance policy to the parents of a child who bullied another pupil. The insurer argued that the injuries claimed by the plaintiff were a result of an intentional act of assault, threatening and bullying. The policy … Continue reading

Insurance law around the world

By Donald Dinnie on December 8, 2014 Posted in Insurance

Our global insurance practice has topped the Law 360 list of the 10 largest insurance practice groups in the world.… Continue reading

Nothing special about “Res ipsa loquitur” (the facts speak for themselves)

By Jay Page on December 1, 2014 Posted in Insurance

The supreme court of appeal has endorsed calls to jettison the term res ipsa loquitor (the thing speaks for itself) completely from our law. The court remarked that res ipsa loquitur is not a legal rule, is misleading and is unnecessary. Res ipsa loquitur has for some time been championed by plaintiff attorneys in medico-legal … Continue reading

Household insurance – Break-in by physical damage required

By Anton Du Randt on November 26, 2014 Posted in Insurance

A policy that indemnifies household contents insured for a break-in or theft that requires the observer to “see physical damage” will compensate the insured only if physical damage can be seen by the insurer after the event. The insured in Pillay v The Hollard Insurance Company Limited alleged that various items of clothing and other household … Continue reading

Apartment gas leak one occurrence despite multiple injuries

By Patrick Bracher (ZA) on November 18, 2014 Posted in Insurance

A US court limited coverage for a carbon monoxide leak that killed one person and seriously injured others in different apartments in a single block. There was a single cause and therefore one occurrence. The court found that while the gas undoubtedly travelled to different rooms within a single building at different times over several … Continue reading

Fraudulent insurance claims

By Donald Dinnie on October 22, 2014 Posted in Insurance

In English law an insured who uses a fraudulent device to promote an otherwise valid claim forfeits the claim. This is not the position in South African law. Unless there is an appropriately worded fraud clause an insured who embellishes their claim with a lie where it is in all other respects valid will not … Continue reading

60 not 40 days’ notice to FSB to end binders

By Christine Rodrigues on October 17, 2014 Posted in Insurance

Regulation 6.6 of the Short-term Insurance Act requires an insurer to give notice to the Financial Services Board (FSB) 60 days before the termination date of a binder agreement (the form of the notice is in Annexure A of Directive 151). Directive 151 mistakenly stipulates that notice must be given 40 days before the termination … Continue reading

Reinsurance warranty not to sail into storm is enforceable

By Patrick Bracher (ZA) on September 21, 2014 Posted in Insurance

A UK court in Amlin Corporate Member Ltd v Oriental Assurance Corporation held that reinsurers were entitled to enforce an express warranty clause that provided that cargo on the carrying vessel would not be covered if the vessel sailed out of port when there was a typhoon warning. The vessel did sail into a typhoon despite … Continue reading

When are you having a riot?

By Patrick Bracher (ZA) on September 2, 2014 Posted in Insurance

A rare UK insurance decision looking at the definition of “riotously” found that the focus of the enquiry is whether property is damaged or destroyed as a result of mob violence. There does not have to be a confrontation. An attack in a private place on an empty building was held to be sufficiently riotous … Continue reading

Insurance Council of Australia code in plain language

By Patrick Bracher (ZA) on August 11, 2014 Posted in Insurance

The Insurance Council of Australia has published a revised General Insurance Code of Practice. It contains nothing unique or startling but it will give insurers some good ideas, written in plain language, about things you might want to incorporate in your own Treating Customers Fairly philosophy.… Continue reading