Tag archives: Insurance

Think twice before rejecting a Calderbank offer

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

Policyholder can assign benefits without consent

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

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

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

The disclosure test is in the insurance act

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

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

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

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

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

Right to intermediary commission

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

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

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

Fraudulent insurance claims

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

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

When are you having a riot?

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