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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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