Tag archives: Misrepresentation

Claim rejected for misrepresentation and fraudulent claim (Aus)

By Patrick Bracher (ZA) on September 5, 2022 Posted in Insurance

A claim for damage to a concrete pump fitted to a truck was denied by an Australian Supreme Court on the grounds of misrepresentation and nondisclosure regarding the pre-insurance unit’s history and a fraudulent claim in which pre-existing damage was denied. The insured had owned the unit for some time but had not insured it … Continue reading

Directors and Officers Insurance and Material Non-Disclosure & Misrepresentation (Australia)

By Donald Dinnie on August 5, 2022 Posted in Insurance

In this judgment the court considered the insured’s duty of disclosure and the insurers’ ability to avoid the policy under the relevant Australian legislation. The question turned on what was called the Iraq File Note written in November 2010.The insurers contended that the contents should have been disclosed before renewal of the policy in 2011. … Continue reading

Misrepresentation inducing a contract is not a breach excluded by the contractual exclusion clause in a policy (US)

By Patrick Bracher (ZA) on August 4, 2021 Posted in Insurance

A US court found that the exclusion in an insurance policy against losses arising out of or involving a breach of contract or agreement did not exclude a claim resulting from a misrepresentation that induced the contract. The insurer was excused from paying the amount of an arbitration award arising from a business dispute which … Continue reading

Fraudulent misrepresentation defeats voetstoots clause in sale

By Patrick Bracher (ZA) on October 21, 2018 Posted in General

Where a seller had fraudulently failed to disclose a defective roof and sewerage system covered by buildings constructed without required statutory approval he was successfully sued in delict for fraudulent misrepresentation and fraudulent nondisclosure. Because the conduct was fraudulent the delictual claim defeated the voetstoots clause in the deed of sale as well as the … 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

Court restates principles relating to the duty of utmost good faith in insurance contracts (UK)

By Sandra Sithole (ZA) on September 14, 2017 Posted in Insurance

A UK court has found that an insurer is entitled to avoid a policy where the insured had misrepresented the state of repair of the insured property and failed to disclose malicious acts and vandalism which had the effect of increasing the risk of fire in the property. The insured, a mixed commercial and residential … Continue reading

Struck off doctor practising without insurance refused appeal (UK)

By Sandra Sithole (ZA) on September 12, 2017 Posted in Insurance

In August 2017, the English Court of Appeal denied an appeal to a gynaecologist who was struck off the roll for practising without professional indemnity cover, which is compulsory in the UK. The doctor, who had a substantial private practice, was uninsured for a period of 5 years between 2007 and 2012. Until 2002, he … Continue reading

Claim rejected for misrepresentation (US)

By Patrick Bracher (ZA) on May 22, 2017 Posted in Insurance

A Pennsylvania court held that the insurer was not liable because of misrepresentation for a portion of a $227 million settlement by a building owner arising from a building collapse that took seven lives and injured 12 people. The event happened as a result of an uncontrolled collapse of a four-storey building which was being demolished … Continue reading

No coverage for false vehicle repair history

By Patrick Bracher (ZA) on July 11, 2016 Posted in Insurance

A US Supreme Court found that the insurer did not have to defend a motor dealership from a suit brought by an individual who alleged that the dealership had misrepresented that the car he bought had not previously been damaged. The policy required the insurer to defend suits alleging tangible harm resulting from an accident. … Continue reading

D&O policy voided for non-disclosure

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

In the USA a directors and officers policy issued to a man who later pleaded guilty to selling $1.9 million in phony stock was voided for non-disclosure. The policy taken out and renewed included a policy application where the director stated he was unaware of any acts, errors or omissions that may be grounds for future … Continue reading

Misrepresentation of past losses avoids policy

By Patrick Bracher (ZA) on March 23, 2016 Posted in Insurance

A US court has allowed an insurer to avoid a $25 million policy it issued to H.J. Heinz Co. because of a material misrepresentation regarding its product recall history. In response to a question whether the company had experienced any product recalls or withdrawals within the previous ten years, the insured failed to disclose a destruction … Continue reading

Non-disclosure, misrepresentation and waiver of the insurer’s right to avoid the policy

By Donald Dinnie on November 23, 2015 Posted in Insurance

In an English court judgment in Brit UW Limited v F&B Trenchless Solutions Limited the insurer successfully sought a declaration that avoided a contractor’s combined liability policy. The policy had been issued to the insured as a specialist tunnelling contractor. A derailment of a train occurred at a site where the insured had recently constructed a … Continue reading

Insurer cannot rely on misrepresentation if it fails to investigate doubtful facts

By Patrick Bracher (ZA) on August 31, 2015 Posted in Insurance

A recycling company (materially represented) that its recycling was 80% aluminium, 20% iron/steel with small amounts of non-metals when in fact plastics and paper exceeded 50% of the recycling. It was held that the insurer had waived its right to rescind the policies because it failed to investigate information revealing a different story from that … Continue reading

Insurers can rely on misrepresentation made after declining a claim on other grounds

By Donald Dinnie on July 16, 2015 Posted in Insurance

The Irish High Court confirmed that an insurer is entitled to rely on additional reasons for declining liability under a policy, although not included in the original rejection letter, and only raised in the context of subsequent litigation. The insurer, under an income protection plan providing cover for disability, rejected the insured’s claim on the … Continue reading

Misrepresentation: Synthetic marijuana is not a natural health food

By Patrick Bracher (ZA) on May 17, 2015 Posted in Insurance

A company accused of falsely labelling and marketing synthetic substances that mimic the effects of marijuana described its business as selling natural health food products. They also said that they did not participate in any ineligible operations such as packaging and manufacturing. It was found that the synthetic substance they sold was not a natural … Continue reading

Be careful what you say: Damages for misrepresentation

By Donald Dinnie on April 30, 2015 Posted in Insurance

The driver of a security vehicle was awarded damages against his employer for injuries he sustained in a hijacking because he did not have the promised bullet proof glass windscreen. When being interviewed for the job, the plaintiff had been informed that he would be driving a fully armoured vehicle and the front section of … Continue reading

False allegation of owner occupation is material

By Patrick Bracher (ZA) on April 2, 2015 Posted in Insurance

A New York appeals court held that the insurers did not have to cover a fire claim because two of the original applications for cover falsely alleged that the property was occupied by the owner. The insured also filled in mortgage application documents (on which the insurer was entitled to rely) to the effect that … 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

Policy misstated insured builder’s name – No cover

By Patrick Bracher (ZA) on June 12, 2014 Posted in Insurance

An insurance policy in the UK provided cover against the risks of insolvency or defective work on the part of the builder. The policy misstated the name of the main contractor as TT Construction instead of TT Bedford. When TT Bedford went insolvent the insured sought an indemnity from the insurers for the losses incurred … Continue reading