Tag archives: Insurance

Insurance and meaning of “sudden, unintended and unexpected happening”

By Donald Dinnie on December 5, 2022 Posted in Insurance

In this recent High Court judgment, the insurance policy under consideration contained a pollution exclusion with the proviso that the exclusion did not apply where the pollution was caused by a “sudden, unintended and unexpected happening” during the period of the insurance. It was common cause that the contamination of the third party’s land was … Continue reading

Insurance contamination exclusion upheld as unambiguous and properly located in policy

By Patrick Bracher (ZA) on March 3, 2022 Posted in Insurance

Faced with an unambiguous lead contamination exclusion, a damages claimant, alleging personal injury to a child from ingesting lead from the paint in a rented property, unsuccessfully contended that the exclusion was unenforceable because it was allegedly hidden 30 pages into the policy. According to the exclusion, the insurance did not apply to injury “arising … Continue reading

The law does not require impossibilities and its effect on prescription

By Patrick Bracher (ZA) on December 17, 2021 Posted in General, Insurance

In finding that the Road Accident Fund Act three year extinctive prescription period (with some exceptions) did not apply to the claimant who had become a person of unsound mind because of the motor accident, the Constitutional Court applied the impossibility principle (lex non cogit ad impossibilia). It was held that the claimant’s action had … Continue reading

A pension fund cannot challenge the Pension Fund Adjudicator’s section 37C decision

By Michelle David on July 20, 2021 Posted in Insurance

A pension fund failed in its application for reconsideration of the Pension Fund Adjudicator’s (PFA) decision to refer the matter back to the fund for reconsideration because, according to the Financial Services Tribunal the fund is not a ‘person aggrieved’ as required by section 230 of the Financial Sector Regulation Act of 2017. The fund … Continue reading

Touting for clients not an insured professional service (US)

By Patrick Bracher (ZA) on May 24, 2021 Posted in Insurance

After the oil rig blowout off the coast of Louisiana in 2010 which led to a litigation frenzy, practising attorneys paid runners millions of dollars to sign up tens of thousands of potential plaintiffs who were unaware of what their information was required for. The lawyers also filed unauthorised presentment forms on behalf of the … Continue reading

Insurance fraud and fraud clauses

By Donald Dinnie on April 23, 2021 Posted in Insurance

The Supreme Court of Appeal in an April 2021 judgment dealt with the interpretation and application of a fraud clause found in the policy.. The clause read: “If you, or anyone acting on your behalf submits a claim, or any information or documentation relating to a claim, that is in any way fraudulent, dishonest or … Continue reading

Covid-19 claim rejected because of virus exception (US)

By Patrick Bracher (ZA) on April 14, 2021 Posted in Insurance

A Kentucky US district court rejected the business interruption insurance claim of a retail business specialising in sale of outdoor sportswear and equipment for losses suffered as a result of government restrictions following the outbreak of Covid-19. The all-risks policy covered physical loss and damage but excluded damage caused directly or indirectly regardless of any … Continue reading

Insurance policies and absolute and relative warranties

By Donald Dinnie on April 14, 2021 Posted in Insurance

In South African insurance law a warranty is usually a condition precedent to inception or continuation of cover or payment of a claim. The consequence of breach or non-fulfilment is that there is no obligation on the insurer to indemnify the insured. Warranties may be absolute or relative. An obligation requiring that a certain state … Continue reading

Subrogated claim against fire-causing students rejected because students were insureds (US)

By Patrick Bracher (ZA) on March 29, 2021 Posted in Insurance

The insurer was denied the right to sue two former college students for $4.5 million the insurer had paid to the school after the students accidentally set fire to the dormitory. It was held that the students accommodated in dormitories were equivalent to tenants and insured under the school’s fire policy. The two students used a … Continue reading

Policy interpretation – prevention of access

By Donald Dinnie on March 29, 2021 Posted in Insurance

The United Kingdom Supreme Court in the FCA Test Case appeal dealt with the meaning of “prevention of access” in respect of the prevention of access due to the actions or advice of the local authority because of an emergency which is likely to endanger life or property in a Business Interruption policy. The relevant … Continue reading

Insurer not required to pay for medical marijuana (US)

By Patrick Bracher (ZA) on March 3, 2021 Posted in Insurance

The Massachusetts Appeals Court refused to order an insurance company to pay for the medical marijuana expenses to treat the claimant’s pain stemming from a work-related injury he sustained in 2014. The US situation is curious in that medical marijuana is allowed in some states but is still unlawful under federal law. The Massachusetts law … Continue reading

Claim for loss of use of building precluded by ‘impaired property’ exclusion (US)

By Patrick Bracher (ZA) on February 10, 2021 Posted in Insurance

A conveyor company failed in its claim against its insurers for a loss arising from the supply of a defective cookie packaging machine to a biscuit manufacturer because the policy specifically excluded coverage for “impaired property”. The claim by the biscuit manufacturer against the insured alleged that they were unable to use their new building … Continue reading

New York regulator issues a cyber-insurance risk framework

By Patrick Bracher (ZA) on February 9, 2021 Posted in Insurance

Concerned about pandemic-related extra cyber activity, the rise in ransomware and recent cyber-espionage campaigns, the New York State Department of Financial Services (DFS) issued a cyber-insurance risk framework on 4 February 2021. After describing the risks for insurers and concluding that insurers play a critical role in mitigating and reducing the risks of cyber-crime, the … Continue reading

Legal implications of Coronavirus on global and local business

By Steve Chemaly and Malcolm Hartwell on March 7, 2020 Posted in General

The outbreak of COVID-19 (Coronavirus) has affected many areas of business, and the legal implications extend far beyond the obvious sectors such as tourism and employment law. Click here to look at our publications for a range of insights on the impact of the pandemic if it continues to spread. Here are eight areas affected … 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

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