Key Decisions in Insurance Policies: Policy Stars and Legal Outcomes

1. Where does the Policy point?

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

3. 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

4. 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

5. 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

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

7. 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

8. 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

9. 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.

10. 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

11. 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

12. 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

13. 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!