Losses Insurance

Question 1

Basic loss relating to covered risks

Answer 1

Normally it is irrelevant that the loss arose because the claimant insured acted negligently

BUT if the claimant insured deliberately causes the loss it is usually not covered and may not even be claimable for breach of public policy

Deliberately caused by a person other than the insured this loss is usually claimable

Patrick v Royal London Mutual Insurance Society - Fire set by son, didn’t mean all to burn down so not held liable.

Sofi v Prudential Assurance Co - Jewerrly, not reasonable care taken.

Each case turns on their own facts.

Things that go wrong with items anyway, can’t insure against

Question 2

Constructive terms

Answer 2

Establish intention of the parties as evidenced by the contract

Question 3

Normally give words ordinary meaning

Answer 3

Thompson v Equity Fire Insurance Co - Couldn’t rely on petrol storage

In many situations won’t be covered when car is unattended.
Langford v Legal and General

Question 4

Technical meaning and context

Answer 4

It will often prevail, Canelhas Comercio Importaco v Wooldridge

Young v Sun Alliance

Question 5

ALL RISKS

Answer 5

If it has this then prima facie suggested that all accidental losses concerning the property are covered

Fire needs ignition - Austin v Drewe - Forgot to open vent, not heat damage
Harris v Poland

Question 6

Accident in 1st party

Answer 6

This arose unnaturally from an unexpected event regardless of any negligence by the insured.

Cornish v Accident Insurance Co - Was he covered for train v human, no pay out

Question 7

Accident in 3rd party cover

Answer 7

If the loss arises from natural cause it will not be accidental. Dhak v Insurance Co - Back injury then used alcohol to medicate, couldn’t be tied to previous injury

Question 8

Property lost

Answer 8

Holmes v Payne - Needs to be salvage of it then return the goods.

Moore v Evans - Pearls sent to Germany, impossible to get back insurer objected to payout, so didn’t get pay out,

Webster v General Accident - Car sold in manor that was nemo dat rule

Question 9

Insured must show that the covered loss was proximately caused by insured peril

Answer 9

Needs to be proximate cause - main or dominated cause

Leyland Shipping v Norwich Union - Tried to get into French boat, got totalled by the weather not torpedo

Question 10

Can’t make a claim that will infringe public policy

Answer 10

Public policy will not allow the payment of a claim which allows an insured to benefit from his own and wrongful act.

1st party insured cannot usually claim for a loss that he deliberately caused or will so cause - WH Smith v Clinton

Nor may he claim for his own illegal or delictual acts -
Euro-Diam Ltd v Bathurst - Understated it value

Public policy prevents any payment of life insurance money to beneficiary who murdered the deceased.

No claims that indirectly infringe public policy - 3rd party insured also cannot usually claim or benefit

Generally don’t pay out when contrary to PP

Gray v Barr - Violence short of crime, could there be a claim for accidental death of someone who didn’t make it,

Motor insurance exception - Tinline v White Cross Insurance

Question 11

Making a claim?

Answer 11

Need to tell insurer what’s happened and within time limit. Provide particulars within loss or event. Data will need to provided.

Question 12

Waiver and Estoppel

Answer 12

If the insured breaches a term in the insurance contract classified as a condition and this breach is either waived by the insurer or the insurer has acted in such a way as to be estopped from relying on that breach of condition, the breach cannot be sued against the insured.

Question 13

Fraudulent Claims

Answer 13

Problem for everyone, these are not permitted. Utmost good faith, don’t work in public policy terms, violate terms of policy.

Question 14

Legitimate Claims

Answer 14

Scots law the insured’s valid claim is for a sum of money representing his loss.

You will get paid. Life insurance you will get what’s specificed. Value of good being replaced.

Question 15

General Principles

Answer 15

If 1st party contingency policy (not indemnity) Get the amount specified in and subject to terms of the contract

3rd party liability policy the victim gets the available amounts as specific by the contract, but indemnity insurance on goods, property you may only be subject to contract, only get enough to return thing. You choose to contract out of indemnity principle by clearly agreeing instead on a excess value

Question 16

Indemnity Principle

Answer 16

If you have indemnity policy you may only recover the amount required to indemnify you against the loss you have suffered at the time when loss materialised.

sum insured means upper limit on recovery that prevents higher recovery

Loss is partial insured will receive difference between the value at the time of loss and value after the loss.

If you have option of paying either the market value or opting for reinstatement, company will go for cheaper option