Law of Insurance Warranties, The
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APPENDIX 4
Clauses 9, 10 and 11 of draft legislation on warranties and other terms as set out in Law Commission Report Law Com No 353, July 2014
Clauses 9, 10 and 11 of draft legislation on warranties and other terms as set out in Law Commission Report Law Com No 353, July 2014
1Warranties and representations
- s9 (1)This section applies to representations made by the insured in connection with
- (a) a proposed non-consumer insurance contract, or
- (b) a proposed variation to a non-consumer insurance contract.
- (2) Such a representation is not capable of being converted into a warranty by means of any provision of the non-consumer insurance contract (or of the terms of the variation), or of any other contract (and whether by declaring the representation to form the basis of the contract or otherwise).
Breach of warranty
- S10 (1)Any rule of law that breach of a warranty (express or implied) in a contract of insurance results in the discharge of the insurer’s liability under the contract is abolished.
- (2) Subject to section 11, an insurer has no liability under a contract of insurance in respect of any loss occurring, or attributable to something happening, after a warranty (express or implied) in the contract has been breached but before the breach has been remedied.
- (3) But subsection (2) does not apply if
- (a) because of a change of circumstances, the warranty ceases to be applicable to the circumstances of the contract,
- (b) compliance with the warranty is rendered unlawful by any subsequent law, or
- (c) the insurer waives the breach of warranty.
- (4) Subsection (2) does not affect the liability of the insurer in respect of losses occurring, or attributable to something happening
- (a) before the breach of warranty, or
- (b) if the breach can be remedied, after it has been remedied.
- (5) For the purposes of this section, a breach of warranty is to be taken as remedied
- (a) in a case falling within subsection (6), if the risk to which the warranty relates later becomes essentially the same as that originally contemplated by the parties,
- (b) in any other case, if the insured ceases to be in breach of the warranty.
- (6) A case falls within this subsection if
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(a) the warranty in question requires that by an ascertainable time something is to be done (or not done), or a condition is to be fulfilled, or something is (or is not) to be the case, andPage 250
- (b) that requirement is not complied with.
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- (7) In the Marine Insurance Act 1906
- (a) in section 33 (nature of warranty), in subsection (3), the second sentence is omitted,
- (b) section 34 (when breach of warranty excused) is omitted.
Terms relevant to particular descriptions of loss
- S11 (1)This section applies to any term (express or implied) of a contract of insurance compliance with which would tend to reduce the risk of one or more of the following
- (a) loss of a particular kind,
- (b) loss at a particular location,
- (c) loss at a particular time.
- (2) Breach of such a term may not be relied upon by the insurer to exclude, limit or discharge its liability for, respectively
- (a) loss of a different kind,
- (b) loss at a different location,
- (c) loss at a different time.
This section may apply in addition to section 10.