Insurance policy

The Court of Appeal, composed of Chief Justice Mark Chetcuti, Judge Joseph R Micallef and Judge Tonio Mallia, on June 30, 2021 in the case “Ambrose Mackay, Jessica Eddelston Mackay and Doris Mackay vs Citadel Insurance plc” held , among other things, that if there had been full disclosure of all material facts, in particular, that his insured was inflicted by a terminal illness, Citadel Insurance would not have proceeded to issue the life insurance policy. The insurance company was deceived into believing that its insured was in good health.

The facts of this case were as follows:

The applicants, Ambrose Mackay, Jessica Mackay and Doris Mackay were the heirs of Jesmond Mackay, who died at the age of 45 on August 26, 2008.

Jesmond Mackay purchased a life insurance policy from Citadel Insurance to secure a loan of EUR 193,337 from Bank of Valletta.

The insurance policy was signed on February 6, 2008 and came into effect on January 12, 2008.

On his death, however, the insurance company refused to pay and alleged that the insurance policy was tainted with a serious omission: the non-disclosure of a substantial and material fact by the insured, in violation of the principle of the greatest good faith, the
uberrimae fidei.

The insurance company claimed that the deceased, Jesmond Mackay, gave false answers on his application form. He failed to inform them that he was suffering from abdominal pain at the time. Nor that he had consultation visits with his family doctor, and that he was referred to the general hospital and to a private clinic where a series of tests and an ultrasound of the abdomen were performed to verify any serious illness. All this at the same time that Citadel Insurance was about to issue the life insurance policy.

The deceased Jesmond Mackay hid the results of an ultrasound on his stomach, where he was later diagnosed with liver metastases.

His answers to certain questions on the insurance company’s application form as well as during his medical examination by the doctor at the Citadel were found to be dishonest and incorrect.

The fact that the family doctor initially did not suspect cancer but only intended to conduct further investigations and tests could not be taken as a justification, the insurance argued.

Faced with this situation, the applicants brought legal action against Citadel Insurance, asking the court to order them to pay the sum it liquidated as due under the insurance policy. They also asked the court to hold the insurance company liable for the damages they suffered, which consisted of additional interest accrued for the benefit of the Bank of Valletta.

The plaintiffs argued that Citadel Insurance should be ordered to pay such damages.

The insurance company should not be allowed to shirk its responsibilities under the banner of the principle of the greatest good faith which is required in insurance contracts.

“The phrase uberrimae fidei ‘has been too frequently and almost indiscriminately used by insurers and judges as an excuse to ignore insurance claims“: re: candidate Mario Mizzi against candidate Mario Grech (Civil court of the first room, October 3, 2003)

Citadel Insurance, in response, raised the preliminary objection that the applicants had no legal interest in bringing this action and even if the courts were to reject this exception, that their claims could not be made without the presence of Bank. of Valletta in this procedure.

The insurance company argued on the merits that the insurance policy was invalidated by the failure of its insured, Jesmond Mackay, to disclose material facts on its application form, which released it from any obligation to pay compensation.

He said the late Jesmond MacKay had violated one of the cardinal principles of insurance law: to act with the utmost good faith.

Citadel’s first two preliminary rulings were dismissed by the court of first instance on July 1, 2011 and confirmed on appeal on September 28, 2012. The insurance company was ordered to pay the costs relating to these two pleas.

On May 18, 2016, the Court of First Instance decided without hesitation that the life insurance contract was null and void for non-disclosure of an important fact by its insured.

She considered that the insurance contract was based on the principle of the greatest good faith. A claimant had to act honestly. He was to disclose all the information relevant to the case: re: Paul Grech and vs Middlesea Insurance plc and as of July 28, 2014, reference was made to the Rozanes vs Bowen case, 1928, where the English courts ruled “It has been for centuries in England the law in matters of insurance of all kinds, that as the policyholder knows nothing and the man who comes to him to insure knows everything, it is the duty of the insured, of the man who desires to have a policy, to make full disclosure to insurers, without being questioned about all the material circumstances. This is expressed by saying that it is a contract of the greatest good faith … it is the duty of the insured to inform the insurer of everything that he does not have taken as knowing, so that the contract can be concluded on an equal footing“.

A “material” fact was such that it could influence the decision of a prudent insurer whether or not to cover the risk. A false declaration of an important fact entailed the nullity of the contract.

The Court of Appeal, in the “Paul Grech” case, also referred to the “Arterial Carowners Ltd v Yorkshire Insurance Co in 1973 (Chapman J) case, where the English courts stated:”the primary obligation was an obligation to disclose on the part of the insured, and not to investigate the insurer. “

In the court’s opinion, a false answer amounted to a false statement of a material fact which could invalidate the policy.

Our Courts of Justice have also adopted this principle: Camilleri noe v Bartolo of March 22, 1982, First Hall Civil Court. An insured had a duty to give a clear answer on the proposal form and to make full disclosure of all facts that they reasonably believed to be relevant even if they were not requested.

Damaged by the decision of the First Court Civil Hall, the applicants appealed, requesting its dismissal. According to them, the court of first instance did not take into account the element of incentive, namely whether the insurance company was misled by its insured Jesmond MacKay and would not have agreed to underwrite the risk. under the circumstances.

The applicants also appealed against the award of legal costs. An insurance contract should only be terminated for serious reasons of fact and law.

The Court of Appeal agreed with the decision of the first chamber of the civil court. His insured, Jesmond Mackay did not act according to the standards of the principle of the highest good faith.

According to the Court, it was likely that if there had been full disclosure of all material facts, in particular that its insured had been inflicted by a terminal illness, Citadel Insurance would not have proceeded with the issuance of the police. The insurance company was deceived into believing that its insured was in good health. In the Court’s view, this constituted an “inducement”. The insurance company’s consent to cover the risk was flawed, the Court of Appeal noted.

Regarding the legal costs, it was clear that when the Court of First Instance ordered the appellants to bear these costs, but this did not include the determination of Citadelle’s first two pleas. This case had already become res judicata at the time, the First Hall Civil Court rendered its decision.

For these reasons, on June 30, 2021, the Court of Appeal ruled by dismissing the applicants’ appeal and upholding the decision of the first chamber of the civil court with costs.

This report was first published in the Malta Independent.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

The Court of Appeal, composed of Chief Justice Mark Chetcuti, Judge Joseph R Micallef and Judge Tonio Mallia, on June 30, 2021 in the case “Ambrose Mackay, Jessica Eddelston Mackay and Doris Mackay vs Citadel Insurance plc” held , among other things, that if there had been full disclosure of all material facts, in particular, that his insured was inflicted by a terminal illness, Citadel Insurance would not have proceeded to issue the life insurance policy. The insurance company was deceived into believing that its insured was in good health.

The facts of this case were as follows:

The applicants, Ambrose Mackay, Jessica Mackay and Doris Mackay were the heirs of Jesmond Mackay, who died at the age of 45 on August 26, 2008.

Jesmond Mackay purchased a life insurance policy from Citadel Insurance to secure a loan of EUR 193,337 from Bank of Valletta.

The insurance policy was signed on February 6, 2008 and came into effect on January 12, 2008.

On his death, however, the insurance company refused to pay and alleged that the insurance policy was tainted with a serious omission: the non-disclosure of a substantial and material fact by the insured, in violation of the principle of the greatest good faith, the
uberrimae fidei.

The insurance company claimed that the deceased, Jesmond Mackay, gave false answers on his application form. He failed to inform them that he was suffering from abdominal pain at the time. Nor that he had consultation visits with his family doctor, and that he was referred to the general hospital and to a private clinic where a series of tests and an ultrasound of the abdomen were performed to verify any serious illness. All this at the same time that Citadel Insurance was about to issue the life insurance policy.

The deceased Jesmond Mackay hid the results of an ultrasound on his stomach, where he was later diagnosed with liver metastases.

His answers to certain questions on the insurance company’s application form as well as during his medical examination by the doctor at the Citadel were found to be dishonest and incorrect.

The fact that the family doctor initially did not suspect cancer but only intended to conduct further investigations and tests could not be taken as a justification, the insurance argued.

Faced with this situation, the applicants brought legal action against Citadel Insurance, asking the court to order them to pay the sum it liquidated as due under the insurance policy. They also asked the court to hold the insurance company liable for the damages they suffered, which consisted of additional interest accrued for the benefit of the Bank of Valletta.

The plaintiffs argued that Citadel Insurance should be ordered to pay such damages.

The insurance company should not be allowed to shirk its responsibilities under the banner of the principle of the greatest good faith which is required in insurance contracts.

“The phrase uberrimae fidei ‘has been too frequently and almost indiscriminately used by insurers and judges as an excuse to ignore insurance claims“: re: candidate Mario Mizzi against candidate Mario Grech (Civil court of the first room, October 3, 2003)

Citadel Insurance, in response, raised the preliminary objection that the applicants had no legal interest in bringing this action and even if the courts were to reject this exception, that their claims could not be made without the presence of Bank. of Valletta in this procedure.

The insurance company argued on the merits that the insurance policy was invalidated by the failure of its insured, Jesmond Mackay, to disclose material facts on its application form, which released it from any obligation to pay compensation.

He said the late Jesmond MacKay had violated one of the cardinal principles of insurance law: to act with the utmost good faith.

Citadel’s first two preliminary rulings were dismissed by the court of first instance on July 1, 2011 and confirmed on appeal on September 28, 2012. The insurance company was ordered to pay the costs relating to these two pleas.

On May 18, 2016, the Court of First Instance decided without hesitation that the life insurance contract was null and void for non-disclosure of an important fact by its insured.

She considered that the insurance contract was based on the principle of the greatest good faith. A claimant had to act honestly. He was to disclose all the information relevant to the case: re: Paul Grech and vs Middlesea Insurance plc and as of July 28, 2014, reference was made to the Rozanes vs Bowen case, 1928, where the English courts ruled “It has been for centuries in England the law in matters of insurance of all kinds, that as the policyholder knows nothing and the man who comes to him to insure knows everything, it is the duty of the insured, of the man who desires to have a policy, to make full disclosure to insurers, without being questioned about all the material circumstances. This is expressed by saying that it is a contract of the greatest good faith … it is the duty of the insured to inform the insurer of everything that he does not have taken as knowing, so that the contract can be concluded with an equal footing“.

A “material” fact was such that it could influence the decision of a prudent insurer whether or not to cover the risk. A false declaration of an important fact entailed the nullity of the contract.

The Court of Appeal, in the “Paul Grech” case, also referred to the “Arterial Carowners Ltd v Yorkshire Insurance Co in 1973 (Chapman J) case, where the English courts stated:”the primary obligation was an obligation to disclose on the part of the insured, and not to investigate the insurer. “

In the court’s opinion, a false answer amounted to a false statement of a material fact which could invalidate the policy.

Our Courts of Justice have also adopted this principle: Camilleri noe v Bartolo of March 22, 1982, First Hall Civil Court. An insured had a duty to give a clear answer on the proposal form and to make full disclosure of all facts that they reasonably believed to be relevant even if they were not requested.

Damaged by the decision of the First Court Civil Hall, the applicants appealed, requesting its dismissal. According to them, the court of first instance did not take into account the element of incentive, namely whether the insurance company was misled by its insured Jesmond MacKay and would not have agreed to underwrite the risk. under the circumstances.

The applicants also appealed against the award of legal costs. An insurance contract should only be terminated for serious reasons of fact and law.

The Court of Appeal agreed with the decision of the first chamber of the civil court. His insured, Jesmond Mackay did not act according to the standards of the principle of the highest good faith.

According to the Court, it was likely that if there had been full disclosure of all material facts, in particular that its insured had been inflicted by a terminal illness, Citadel Insurance would not have proceeded with the issuance of the police. The insurance company was deceived into believing that its insured was in good health. In the Court’s view, this constituted an “inducement”. The insurance company’s consent to cover the risk was flawed, the Court of Appeal noted.

Regarding the legal costs, it was clear that when the Court of First Instance ordered the appellants to bear these costs, but this did not include the determination of Citadelle’s first two pleas. This case had already become res judicata at the time, the First Hall Civil Court rendered its decision.

For these reasons, on June 30, 2021, the Court of Appeal ruled by dismissing the applicants’ appeal and upholding the decision of the first chamber of the civil court with costs.

This report was first published in the Malta Independent.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

Karl Grech Orr

The Court of Appeal, composed of Chief Justice Mark Chetcuti, Judge Joseph R Micallef and Judge Tonio Mallia, on June 30, 2021 in the case of “Ambrose Mackay, Jessica Eddelston Mackay and Doris Mackay vs Citadel Insurance plc” held , among other things, that if there had been full disclosure of all material facts, in particular that its insured was inflicted by a terminal illness, Citadel Insurance would not have proceeded to issue the life insurance policy. The insurance company was deceived into believing that its insured was in good health.

The facts of this case were as follows:

The applicants, Ambrose Mackay, Jessica Mackay and Doris Mackay were the heirs of Jesmond Mackay, who died at the age of 45 on August 26, 2008.

Jesmond Mackay purchased a life insurance policy from Citadel Insurance to secure a loan of EUR 193,337 from Bank of Valletta.

The insurance policy was signed on February 6, 2008 and came into effect on January 12, 2008.

On his death, however, the insurance company refused to pay and alleged that the insurance policy was tainted with a serious omission: the non-disclosure of a substantial and material fact by the insured, in violation of the principle of the greatest good faith, the uberrimae fidei.

The insurance company claimed that the deceased, Jesmond Mackay, gave false answers on his application form. He failed to inform them that he was suffering from abdominal pain at the time. Nor that he had consultation visits with his family doctor, and that he was referred to the general hospital and to a private clinic where a series of tests and an ultrasound of the abdomen were performed to verify any serious illness. All this at the same time that Citadel Insurance was about to issue the life insurance policy.

The deceased Jesmond Mackay hid the results of an ultrasound on his stomach, where he was later diagnosed with liver metastases.

His answers to certain questions on the insurance company’s application form as well as during his medical examination by the doctor at the Citadel were found to be dishonest and incorrect.

The fact that the family doctor initially did not suspect cancer but only intended to conduct further investigations and tests could not be taken as a justification, the insurance argued.

Faced with this situation, the applicants brought legal action against Citadel Insurance, asking the court to order them to pay the sum it liquidated as due under the insurance policy. They also asked the court to hold the insurance company liable for the damages they suffered, which consisted of additional interest accrued for the benefit of the Bank of Valletta.

The plaintiffs argued that Citadel Insurance should be ordered to pay such damages.

The insurance company should not be allowed to shirk its responsibilities under the banner of the principle of the greatest good faith which is required in insurance contracts.

“The phrase uberrimae fidei ‘has been too frequently and almost indiscriminately used by insurers and judges as an excuse to ignore insurance claims”: Re: candidate Mario Mizzi against candidate Mario Grech (Civil Court of the first room, October 3, 2003)

Citadel Insurance, in response, raised the preliminary objection that the applicants had no legal interest in bringing this action and even if the courts were to reject this exception, that their claims could not be made without the presence of Bank. of Valletta in this procedure.

The insurance company argued on the merits that the insurance policy was invalidated by the failure of its insured, Jesmond Mackay, to disclose material facts on its application form, which released it from any obligation to pay compensation.

He said the late Jesmond MacKay had violated one of the cardinal principles of insurance law: to act with the utmost good faith.

Citadel’s first two preliminary rulings were dismissed by the court of first instance on July 1, 2011 and confirmed on appeal on September 28, 2012. The insurance company was ordered to pay the costs relating to these two pleas.

On May 18, 2016, the Court of First Instance decided without hesitation that the life insurance contract was null and void for non-disclosure of a material fact by its insured.

She considered that the insurance contract was based on the principle of the greatest good faith. A claimant had to act honestly. He was to disclose all information relevant to the case: re: Paul Grech and vs Middlesea Insurance plc and dated July 28, 2014, reference was made to the Rozanes vs Bowen case, 1928, where the English courts ruled “It has been for centuries in England the law in matters of insurance of all kinds, that as the policyholder knows nothing and the man who comes to him to insure knows everything, it is the duty of the insured, of the man who desires to have a policy, to make full disclosure to insurers, without being questioned about all the material circumstances. This is expressed by saying that it is a contract of the highest good faith …. it is the duty of the insured to inform the insurer of anything that he has not taken as knowing, so that the contract can be concluded on an equal footing.”.

A “material” fact was such that it could influence the decision of a prudent insurer whether or not to cover the risk. A false declaration of an important fact entailed the nullity of the contract.

The Court of Appeal, in the “Paul Grech” case, also referred to the “Arterial Carowners Ltd v Yorkshire Insurance Co in 1973 (Chapman J) case, where the English courts stated:”the primary obligation was an obligation to disclose on the part of the insured, and not to investigate the insurer. “

In the court’s opinion, a false answer amounted to a false statement of a material fact which could invalidate the policy.

Our Courts of Justice have also adopted this principle: Camilleri noe v Bartolo of March 22, 1982, First Hall Civil Court. An insured had a duty to give a clear answer on the proposal form and to make full disclosure of all facts that they reasonably believed to be relevant even if they were not requested.

Damaged by the decision of the First Court Civil Hall, the applicants appealed, requesting its dismissal. According to them, the trial court ignored the incentive element, namely whether the insurance company was actually misled by its insured Jesmond MacKay and allegedly not agreed to underwrite the risk under the circumstances.

The applicants also appealed against the award of legal costs. An insurance contract should only be terminated for serious reasons of fact and law.

The Court of Appeal agreed with the decision of the first chamber of the civil court. His insured, Jesmond Mackay did not act according to the standards of the principle of the highest good faith.

According to the Court, it was likely that if there had been full disclosure of all material facts, in particular that its insured had been inflicted by a terminal illness, Citadel Insurance would not have proceeded with the issuance of the police. The insurance company was deceived into believing that its insured was in good health. In the Court’s view, this constituted an “inducement”. The insurance company’s consent to cover the risk was flawed, the Court of Appeal noted.

Regarding the legal costs, it was clear that when the Court of First Instance ordered the appellants to bear these costs, but this did not include the determination of Citadelle’s first two pleas. This case had already become res judicata at the time, the First Hall Civil Court rendered its decision.

For these reasons, on June 30, 2021, the Court of Appeal ruled by dismissing the applicants’ appeal and upholding the decision of the first chamber of the civil court with costs.

Karl Grech Orr is a partner at Ganado Advocates

A surety bond is not an insurance policy although there is a substantive similarity in that there is a promise of indemnity for one of the parties involved. An insurance policy is a bipartite arrangement where the insured pays a premium to the insurance company and receives the benefits of the policy in the event of a loss. On the other hand, there are three parties involved in a bond – the principal (the bonded party), the bond company, and the creditor (the party in whose favor the bond is issued). As far as the premium is concerned, it is generally the principal who assumes it, although there are occasions when the creditor pays it.

Under the surety laws, the principal is required to reimburse the surety company for any loss that the surety company may suffer as a result of the performance of the bond. Thus, the Principal is required to sign an Indemnification Agreement or a counter-guarantee in favor of the surety company before the surety is released in favor of the Bondholder.

When taking out a surety bond, the guarantor takes into account the personality, personal situation and resources of the principal and, depending on the nature of the bond obligation, he would also require an adequate guarantee in the form of guarantees such as only real estate, stocks and other securities or the signing of creditworthy guarantors.

The primary purpose of the surety company, at least theoretically, is not to pay losses but to render a service to worthy natural or legal persons whose business requires the guarantee of a surety or surety company. This is the big difference between a bond and an insurance policy. In addition, in insurance, the insurer can terminate the policy with due notice to the insured plus a reimbursement premium for the unexpired period of the policy while in bonds, many bonds cannot be canceled at all unless there is concrete evidence that the bond obligation has been fulfilled. The duration of a surety bond therefore depends on the performance of its obligation or its expiry date, if there is one.

Contractors who bid on and win large construction projects typically post performance bonds to ensure their satisfactory completion. This is just one example of the important role of bonding in business.

The author is a risk management consultant and editor of Insurance Philippines magazine.

Whenever you purchase an insurance policy, make sure you don’t misrepresent the facts, as it could really jeopardize your claim and cause you immense financial loss. A recent consumer court ruling upholding the repudiation of an auto insurance claim really makes this point clear.

The focal point of this case was the dismissal of a claim made by Vinod Kumar, a resident of Mysore, following an accident involving his vehicle – a Volkswagen Jetta, on September 16, 2014. Purchased in 2012, the vehicle was insured with Bajaj Allianz. General Insurance Company from January 8, 2014 to January 8, 2015. Kumar had paid ??30,003 towards the premium

In response to Kumar’s complaint to the consumer court, the insurance company argued that the policy was flawed because the policyholder provided false information at the time of purchase. the police.

The insurer’s case was that the policy owner claimed the car was insured the previous year with Reliance General Insurance and was entitled to a 20 percent discount as a “No Claim Bonus” (PNE). However, the check issued by the consumer to Reliance General Insurance the previous year had been refused and the insurer had therefore not issued the policy at all. Thus, he did not have an automobile insurance policy the previous year and was not entitled to the NCB. Thus, because of false statements and the suppression of material facts, the policy was flawed and the insurer was not obliged to compensate the loss.

The National Consumer Disputes Appeals Board agreed with the lower consumer courts that the insurer was justified in not honoring the claim. Quoting the Supreme Court in Life Insurance Corporation of India Vs. Smt. Asha Goel and Reliance Life Insurance Co Vs. Rekhaben Nareshbhai Rathod, the Commission said there was no illegality in maintaining the repudiation of the claim. (Vinod Kumar Vs Manager, Bajaj Allianz General Insurance Company, RP No 2277 of 2019, decided on August 4, 2021)

Thus, the consumer not only lost the huge premium he paid for the insurance, but also the insurance money to repair the car. On the other hand, if he had told the truth, he might not have gotten the 20% premium discount, but his policy would be intact and the insurer would have had no reason to reject it. his claim.

Consumers may not know that if an auto insurance policy lapses for even one day, the vehicle must be inspected by the insurer before issuing a policy. And even if the policyholder has not made any claims before, if a comprehensive policy is allowed to expire for more than 90 days, the accrued benefit of the “No Claim Bonus” is lost. In other words, if you have a good PNE under your belt, it is important to make sure that there is no break in your vehicle insurance.

So always pay your premium on time, preferably via an electronic payment method, and make sure the policy is issued immediately. Under the Motor Vehicle Act, you cannot drive your vehicle on public roads without liability insurance. And remember, the insurance contract is a contract of the highest good faith and both parties to the contract must ensure that there is no misinformation or non-disclosure of material facts.

Usually, when you change insurer during a renewal or when you take out a new policy on a new car, to benefit from the NCB reduction, you must produce a certificate from your old insurer. In fact, if you look at the insurance regulator’s webpage for policyholders, it says that the proof can be the renewal notice from the current insurer or your original expiring policy as well as an attestation. from your previous insurer, indicating that you have filed no claims on the expiration policy. Obviously, in this case, the insurer did not show due diligence and demanded this proof from the consumer! And in addition, earned a hefty premium, without having to fulfill his part of the insurance contract.

New Delhi: The past year has taught people how medical emergencies can happen without warning. However, the recent second wave caused people to lose their savings on Covid-19 hospital bills because families started to get infected together – family floats were insufficient and basic mediclaim policies of Rs 2 or more. 3 lakhs, have not stood the test of time in the face of exorbitant COVID hospital costs.

The second wave sparked the question of the adequacy of health insurance coverage and its amount. One thing we have learned from the pandemic is the need to prepare for the unprecedented. As the country experiences an increase in the vaccination campaign, we are also seeing a sense of awareness among people, to protect themselves against the coming demand.

While a regular health insurance plan is always beneficial, super supplemental health plans provide an additional layer of security for the insured.

Super Top Up Plan Needs The Hour

Rakesh Jain, CEO of Reliance General Insurance, explains, “While COVID-19 brought to light the inadequacy of coverage, people in India even before Covid suffered from the problem of underinsurance. With medical advances and treatment methods that are technologically modernized day by day. Today, the cost of routine procedures and surgeries has increased dramatically over the past decade. Knee and hip replacements, heart bypass surgery and kidney transplants have seen a 75-80% increase in costs. “

In addition, the cost of long-term procedures like chemotherapy or dialysis that follow surgeries requires a regular outflow of expenses, this must be taken into account before increasing coverage, he added.

Super Top Up acts as a booster for your existing health insurance policy

Most basic health or indemnity policies lack high face amount options, or if they do, they are expensive and discourage customers. Therefore, choosing super supplemental coverage is a viable and inexpensive solution. People are also supplementing coverage with event-based coverages like critical illness coverage or COVID-19 coverage, which will only cover for one instance of hospitalization but will not offer full coverage for future need.

Jain said: “As we have seen scenarios of post-covid effects on multiple organs like kidneys and lungs, but the COVID-19 policy will not apply to such cases subsequently occurring after the event. . Thus, it is extremely critical to have a Super Top-Up if you are considering increasing your coverage. The Super Top-Up, as the word suggests, is in addition to your existing base policy. But it is not a mandate to have a basic policy to buy a super supplement There is a notion of deductible, which must be crossed in the event of a claim. As if you had an insured sum of 10 lakhs with a deductible of 3 lakhs. hospitalization event, once your hospital bill / charge is crossed 3 lakhs, the higher policy will start to cover for a sum of 10 lakhs. “

How to choose the right insurance great charging plan?

As mentioned earlier, recharge plans are based on events where the deductible applies every time. So, if the need for the police must be maintained as a precaution for occasional cases of hospitalization, then we can opt for a complementary policy. But if you want to stay prepared for multiple needs during the insurance period. Then super charging is the solution.

We have seen people with heart disease, diabetes, cancer, kidney stones, etc. common these days and there may be recurring needs for hospitalization or procedures. In this case, super recharge policies are a wise decision to make.

In the decision of the Full Federal Court of Liberty Mutual Insurance Company Australia Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd [2021] FACAC 126 rendered on July 20, 2021, the Plenary Court examined the construction and scope of civil liability policies in the context of claims made by a building and construction company for losses arising as a result of the manifestation of serious defects in the within a building, when the liability for vices point end.

Factual background

Construction and construction company Icon Co (NSW) Pty Ltd (‘Icon’) entered into a design and build contract (‘the Contract’) in October 2015 to construct the now infamous Opal Tower, a building of 37 story mixed residential / commercial development. at Sydney Olympic Park. The contract provided for a liability period for defects of 12 months after practical completion, which took place in August 2018.

On Christmas Eve 2018 (after the practical completion, but during the period of liability for defects), serious defects, including major cracks in the wall panels, floor tiles and cooking hobs, occurred (” the Incident ”). As a result, residents of the building were evacuated while rectification work was undertaken.

The proceedings in Federal Court concerned disputes between Icon and its two liability insurers: Liberty Mutual Insurance (“Liberty”) and QBE, both of which refused to indemnify Icon for the incident.

Decision at trial

With respect to the Liberty policy, Icon argued that a condition of the policy, when incurred, effected coverage of contracts commencing – such that, under the terms of the policy, in each year insurance, Icon has obtained coverage for all contracts declared during the relevant insurance year. during the life of these contracts and, above all, during the periods of liability for defects in these contracts.

Icon also argued that while it was not entitled to compensation under the written terms of the policy, as properly interpreted, it was entitled to have the policy rectified in order to give effect to the intent. Common of Icon and Liberty (i.e. the policy would act as an inception policy and thus provide coverage during the liability period for defaults).

The senior judge was not persuaded that the condition in question could be interpreted so as to give effect to the coverage of the contracts commencing. However, the senior judge accepted that the parties have a mutual intention that coverage for commencing contracts be provided and said the Liberty policy needs to be rectified to reflect the parties’ common intention.

He therefore considered that coverage under the Liberty policy extended to the incident, which occurred during the period of liability for defects.

Regarding the policy of QBE, the Senior Judge accepted that the Opal Tower and its constituent parts were a “product” as defined by the policy, and that the policy responded to the incident. The senior judge also classified the contract under which Icon was insured by QBE as a “completed transaction”, and therefore concluded that the policy exclusions did not apply.

Cross call

Icon argued that the senior judge erred in his interpretation of the condition, and argued that the condition was textually clear and extended coverage to the period of liability for defects in contracts which were incomplete as of the date of termination. expiration, provided proper instructions are given. Icon further argued that this interpretation of the condition was consistent with the business purpose of the insurance that it required as a commercial construction contractor, whose risks and responsibilities extended to the period of liability for faults.

In case of ambiguity in an insurance policy, the Plenary Court considered that it should be resolved taking into account the context (including the market) in which the parties operate. The Full Court agreed with Icon on the business purpose of insurance.

The Full Court allowed the cross-appeal finding that Icon had obtained insurance coverage in the event of Liberty’s liquidation under condition 15 of the Opal Tower policy. Accordingly, she found that Liberty policy coverage extended to the incident that occurred during the defect liability period.

Call for freedom

Having allowed the appeal, the Full Court was not bound to resolve Liberty’s appeal other than setting aside the orders made by the principal judge – as they were inconsistent with Icon’s rights under the condition and the success of the cross-appeal. However, the Full Court considered the liberty appeal and ultimately concluded that the conclusion that the parties knew each other’s intentions and that the intention of the contracts commencing was commonly accepted was clearly available to the senior judge. .

QBE call

QBE argued that the Senior Judge erred in concluding that the Opal Tower, the baking sheets, slabs and walls subject to the defects were each a “product” within the meaning of QBE policy.

QBE argued that the Full Court should take into account the absence of terms included in the definition of “insured’s business”, including “built” and “built” in the definition of “Products” to conclude that the definition of “Products” was deliberately designed to exclude an entire building.

QBE argued that the relevance of this distinction was that the liability risk for “Completed Operations” arose from completed projects, handed over and in particular when Icon’s liability arising from contractual conditions imposing a liability period for defects had expired. This construction would show that QBE could escape responsibility.

Conversely, Icon argued that if there had been the intention to exclude an entire building from the definition of “product”, then one would expect a clear statement to that effect.

The Plenary Court considered that the absence of words clearly designating the process of construction and construction was important but not decisive. The Plenary Court relied on the conclusions of HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296 [28] to see that where the words are ambiguous, you have to analyze the context of the agreement.

As such, the Full Court considered the context of the QBE policy as a whole, considering the distinction between “product” and “completed transactions”, as well as the exclusions applicable under the policy.

The Full Court concluded that the Senior Judge erred in concluding that the definition of “Completed Transactions” was not redundant by the Senior Judge’s definition of “Proceeds”. The result of this error led the principal judge to dismiss the importance of the distinction between “Completed Transactions” and “Products” with regard to exclusions.

The senior judge ruled that the exclusions would not apply to construction contracts and that the contract itself was a “completed transaction” – and therefore did not take into account the exclusions which he said did not apply. applied only to a “product”.

The Full Court accepted QBE’s observations that where the word “Product” can be extended to completed buildings and the liability for “Completed Operations” relates to faulty construction work, the exclusions should be made. ‘apply.

The full Court ultimately allowed the appeal on the grounds that the senior judge should have considered the contextual context in circumstances where the meaning of ordinary words was not clear.

Key to take away

1. The Full Court held that in the event of ambiguity in an insurance policy, the context (including the market) in which the parties operate, as well as the business purpose of the policy, must be taken into account (Icon’s Cross Appeal); and
2. Likewise, the Full Court held that the context of insurance policies must always be considered in circumstances where the definition of ordinary words is unclear (QBE appeal).
3. The Plenary Court ultimately prefers the interpretation of the policy which refers to extrinsic contextual elements where the terms of the policy are not clear.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

In a historic moment for all yak owners in the country, the National Insurance Company Limited (NICL) has officially approved an insurance policy for animals.

This will meet the longstanding demand from yak owners for financial assistance in the face of climatic vagaries and uncertainties.

The demographic trend across the country shows that the yak population has declined at an alarming rate. Additionally, as a result of climate change, inexplicable changes in weather conditions have been reported in yak farming areas across the country.

In one of these cases, more than 500 yaks died in a single period of heavy rains in the northern Sikkim region in 2019, placing a heavy financial burden on owners.

Due to the relentless efforts of the ICAR-National Yak Research Center (NRC), an insurance policy has been approved for yaks by National Insurance Company Limited which will protect yak owners from the risks posed by disasters. weather, illnesses, transit accidents, surgeries and strikes or riots.

ICAR-NRC Yak Director Dr Mihir Sarkar called it a historic development in providing financial security to yak herding communities in Arunachal Pradesh, Sikkim, Ladakh and the ‘Himachal Pradesh. He added that it would be a great boon in the direction of yak conservation and sustainable yak breeding.

According to the policy, an indemnity of 80% of the insured amount or the market value, whichever is less, would be provided for all yaks from 2 to 10 years at a premium rate of 4% for one year and 10% for three years.

For yaks covered by any scheme, a premium beyond three years would be charged at the rate of 1.6% per annum. In addition, different discount rates are available for groups of yaks not covered by any scheme. Additional coverage with an increase of 25% on the premium rate in the event of death due to snowfall is a special feature of this policy.

In order to insure the animals, yak owners must have their yaks ear marked and provide an appropriate description. To obtain the claim, the owner must submit a completed claim form, a death certificate from a practicing veterinarian, an autopsy report and an ear tag.

In addition, there must be a waiting period of 15 days to claim the amount, i.e. the death of an animal due to disease within 15 days of the onset of the risk is not not payable. “