Where does the Policy point?

Where does the Policy point?

Policy Stars Other Key Decisions: • Omega Proteins Ltd v. Aspen Insurance UK Ltd (QBD 2010)

Background • Claimant processed by-products from animal carcases received from Insured • 28 Deliveries made • EEC revised Regulations a few days earlier • Deliveries fell foul of these • Products mixed with other stock from other suppliers • Entire bulk stock was unfit for commercial use

Issues • Insured was in liquidation - proceeded under TP Rights Against Insurers Act 1930 • Exclusion for Liability arising under contract unless it would have attached in absence • Judgement of 1st inst conclusively determined a liability in contract • Aspen sought to rely on this judgement to invoke the ‘contractual liability’ exclusion

Outcome • Court asserted the clause invited consideration of what liability attached in absence of contract • Liability would have attached in tort in any event • It follows that the Policy would have had to respond Where liability attaches in the absence of a contract the exclusion cannot apply

Policy Stars Other Key Decisions: • Fielding Properties (Blackpool) Ltd v. Aviva (QBD 2010)

Background • Indemnity sought for a fire at premises • Condition 7 -Aviva avoid policy if a claim was fraudulent or false declaration made • Aviva sought to invoke for previous fraudulent claims • One was for £9,870 for drain damaged and collusion with repairer proven • Shareholder had also failed to disclose false declarations to other Insurers

Outcome • Aviva were entitled to avoid policy & claim recovery from previous claims • Previous fraudulent claim on personal policy should have been disclosed • Series of false statements • While each taken alone could be considered insignificant - collectively they were material

Policy Stars Other Key Decisions: • McIlroy Swindon Ltd v. Quinn Insurance (Tech & Const. Court 2010) Court did not have power to grant extension of time where valid Arbitration Clause gave time limit that was not observed.

Background • Technology & Construction Court Case (Oct) • Quinn provided product liab cover to Lenihan • Fire occurred at premises worked on • Claim presented by Claimant under TP Rights Against Insurers Act 1930 • Quinn claimed breach of policy conditions by Lenihan • Arbitration clause – any dispute referred to Arrb within 9mths

Issues • No dispute on Primary Legal Liability • Judgement not satisfied as Lenihan went into voluntary liquidation • No reference to any dispute under the policy to Quinn’s Policy repudiation within 9mths • Claimant suggested the clause was unusual and onerous and that Quinn failed to bring it to attention of Insured

Outcome • High Court decided clause was clear • Lenihan had policy for over 2 years • Told to read policy carefully • Brokers had provided advice to Lenihan • Requirement to resolve issues by Arbitration not regarded as onerous just because it was unusual • Denial of Policy Liab had triggered clause in Feb 2009 thus time limit end Nov 2009

Tip! Have you a Quinn Insured on any recovery cases? If they decline policy indemnity it would appear prudent to remind them to check their policy to see if the Arbitration clause is triggered!

Where does the Policy point?