Tag archives: Misrepresentation

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

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)

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

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

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

Claim rejected for misrepresentation (US)

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

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

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

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

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

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

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

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

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