Insurance Law Monthly

The Court of Appeal in Atlasnavios-Navegação Lda v Navigators Insurance Co Ltd and Others (The B Atlantic) [2016] EWCA Civ 808, reversing the trial judge, has ruled that an assured whose vessel is seized by customs authorities for attempted drug-smuggling by third parties unconnected with the assured has no cover under standard war risks insurance. This may be an issue that the insurance market may have to address.

The decision of the Supreme Court in Hayward v Zurich Insurance Company plc [2016] UKSC 48 will be welcomed by all insurers. It is not concerned with an exaggerated claim by a policyholder, but rather an exaggerated claim by a third party against a policyholder covered by liability insurance. The law as regards fraudulently exaggerated insurance claims is straightforward: the entire claim is lost.

There is a generally recognised presumption that, in the case of proportional reinsurance, the insurance and the reinsurance are to be construed back to back so as to provide consistency of cover. That presumption is particularly important where the wording of the two contracts is more or less the same and the premium paid by the reinsured matches the premium received by the reinsured.

The lengthy and detailed judgment of Flanagan J in Matton Developments Pty Ltd v CGU Insurance Ltd (No 2) [2015] QSC 72, previously discussed in Insurance Law Monthly (2016) 28 ILM 4 2), considered the meaning of the commonly used phrase “accidental, sudden and unforeseen” damage and the words “accidental overload”.

The Employers’ Liability (Compulsory Insurance) Act 1969 requires an employer to obtain liability insurance against claims for death and personal injury in respect of employees injured at work. The Act controls the terms that may be included in a policy, and requires an insurer to make payment despite the fact that it would otherwise have the right to refuse to do so by reliance on a restricted term.