Supreme Court Annual Digest 2022- Insurance Law

Insurance - Insurance companies refusing claim on flimsy grounds and/or technical grounds - While settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control. (Para 4.1) Gurmel Singh v. National Insurance Co. Ltd., 2022 LiveLaw (SC) 506 : AIR 2022 SC 2486

Insurance Law - Burden is on the insurer to show case falls within the purview of exclusion clause- In case of ambiguity, benefit goes to the insured. (Para 12) Narsingh Ispat Ltd. v. Oriental Insurance Company Ltd., 2022 LiveLaw (SC) 443 : AIR 2022 SC 2148 : (2022) 6 SCC 654

Insurance Law - Exclusion of liability in insurance policies - as a matter of general principle, it is well established that if one party, otherwise liable, wishes to exclude or limit his liability to the other party, he must do so in clear words; and that the contract should be given the meaning it would convey to a reasonable person having all the background knowledge which is reasonably available to the person or class of persons to whom the document is addressed. (Para 19) United India Insurance Co. Ltd. v. Levis Strauss (India) Pvt. Ltd., 2022 LiveLaw (SC) 487 : (2022) 6 SCC 1

Insurance Law - The vehicle of the complainant (the insured) which was insured with Insurance Company was robbed. The next day, an FIR was registered by him. Accused were arrested and challan filed. Thereafter, the complainant lodged the insurance claim. The same was repudiated on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft. Though District Forum and State Consumer Commission allowed the complaint - NCDRC dismissed it by allowing insurer's revision petition. Allowing the appeal, the Supreme Court set aside the NCDRC order and upheld the State Commission order. Jaina Construction Company v. Oriental Insurance Company Ltd., 2022 LiveLaw (SC) 154 : (2022) 4 SCC 527

Insurance Law - When the policy itself defines the acts of terrorism in the Exclusion Clause, the terms of the policy being a concluded contract will govern the rights and liabilities of the parties. Therefore, the parties cannot rely upon the definitions of 'terrorism' in various penal statutes since the Exclusion Clause contains an exhaustive definition of acts of terrorism. (Para 13) Narsingh Ispat Ltd. v. Oriental Insurance Company Ltd., 2022 LiveLaw (SC) 443 : AIR 2022 SC 2148 : (2022) 6 SCC 654

Insurance Act, 1938

Insurance Act, 1938 - Duty of insurer to disclose exclusion clause - When an exclusion clause is introduced making the contract unenforceable on the date on which it is executed, much to the knowledge of the insurer, non-disclosure and a failure to furnish a copy of the said contract by following the procedure required by statute, would make the said clause redundant and non-existent. [Para 15] Texco Marketing Pvt. Ltd. v. TATA AIG General Insurance Company Ltd., 2022 LiveLaw (SC) 937

Insurance Act, 1938 - An exclusion clause in a contract of insurance has to be interpreted differently. Not only the onus but also the burden lies with the insurer when reliance is made on such a clause. This is for the reason that insurance contracts are special contracts premised on the notion of good faith. It is not a leverage or a safeguard for the insurer, but is meant to be pressed into service on a contingency, being a contract of speculation. An insurance contract by its very nature mandates disclosure of all material facts by both parties. [Para 11] Texco Marketing Pvt. Ltd. v. TATA AIG General Insurance Company Ltd., 2022 LiveLaw (SC) 937

Insurance Act, 1938 - Any non-compliance of IRDA Regulations, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same. [Para 21] Texco Marketing Pvt. Ltd. v. TATA AIG General Insurance Company Ltd., 2022 LiveLaw (SC) 937

Insurance Contract

Insurance Contract - Interpreting ambiguous terms in an insurance contract - first harmoniously by reading the contract in its entirety - if still vague then the term must be interpreted in favour of the insured, i.e., against the drafter of the policy. Haris Marine Products v. Export Credit Guarantee Corporation (ECGC), 2022 LiveLaw (SC) 432 : AIR 2022 SC 3036

Double Insurance

Insurance Law - Double Insurance - where an entity seeks to cover risks for the same or similar incidents through two different - overlapping policies - two or more insurers must have insured the same assured in respect of the same risk on the same interest in the same subject-matter - once the first insurer has paid a complete indemnity to the assured, the second insurer would be entitled to decline liability - in the case of specific risks, such as those arising from loss due to fire, etc., the insured cannot profit and take advantage by double insurance. (Para 46, 47) United India Insurance Co. Ltd. v. Levis Strauss (India) Pvt. Ltd., 2022 LiveLaw (SC) 487 : (2022) 6 SCC 1

Theft of Vehicle

Insurance Law - Theft of Vehicle - Repudiation of Claim - The Insurance Company cannot repudiate claim merely on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft, when the insured had lodged the FIR immediately after the theft of the vehicle. Jaina Construction Company v. Oriental Insurance Company Ltd., 2022 LiveLaw (SC) 154 : (2022) 4 SCC 527