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INSURANCE: An Introduction

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Insurance law continues to develop apace, adapting to changing commercial conditions and changes in the law. Although the Insurance Act 2015 has entered into force (in 2016-17), and reforms the law governing the duty of fair presentation of the risk, breaches of warranty or condition, the insurer’s remedies for fraudulent claims, and the assured’s remedies for late payment of insurance claims, the 2015 Act has not yet been considered by the Court, although such cases are anticipated. This legislation has the potential to make substantial changes to the way insurance business is carried out and to the way in which insurance litigation is conducted. The Third Parties (Rights against Insurers) Act 2010 has been in force since 2016 and has been the subject of some consideration by the Court.

The range of insurance disputes remains varied and widespread, responding to natural and man-made perils, armed conflict, crime, cyber and computer fraud, economic sanctions, financial losses, corporate liabilities, business interruption and property damage. Marine, energy, financial institutions, professional indemnity, global liability, commercial property and consumer insurance policies are the protections designed to deal with these problems.

The Insurance Bar continues to deal with a broad range of insurance and reinsurance disputes. The choice of London as a forum for these disputes and the choice of English law remains prevalent, reflecting the depth of expertise and experience of the Insurance Bar. Its practice is not limited to coverage disputes under insurance and reinsurance policies, but also extends to subrogated proceedings and defence of claims, and claims against other insurance professionals, such as brokers.

The Supreme Court has considered a number of insurance disputes over the past year, sometimes with substantial changes to the law, especially in The B Atlantic (war risks insurance exclusion), Versloot Dredging v Gerling (fraudulent claims), AIG v Woodman (professional indemnity insurance), and The Ocean Victory.

Insurance litigation encompasses both marine and non-marine insurance. There have been and continue to be a number of notable marine insurance disputes over the past year. Energy and Hull claims, including total loss claims, continue to dominate (including SBM Mopustor, Atlantik Confidence, The Brillante Virtuoso, The Renos and The B Atlantic), in addition to trade commodities claims (Engelhart CTP v Lloyd’s).

There remains, as ever, a broad spectrum of non-marine insurance cases within the work of the Insurance Bar. There have been disputes concerning insurance exclusions (Goodlife Foods v Hall Fire Protection, Crowden v QBE, Nesbit Law v Acasta European, Leeds Beckett University v Travelers), fraudulent claims (Axa v Financial Claims Solutions), arbitration agreements (Allianz v Tonicstar), aggregation provisions (Spire Healthcare v RSA), notification under liability policies (Cultural Foundation v Beazley Furlonge Ltd, Euro Pools v RSA), the Third Parties (Rights against Insurers) Acts 1930 and 2010 (Cultural Foundation v Beazley Furlonge Ltd, BAE Systems Pension Funds v RSA, Redman v Zurich), risk presentation (Dalecroft Properties v Underwriters, Axa v Arab Insurance), conditions precedent (Denso v Great Lakes, Zurich v Maccaferri, Ted Baker v Axa), and warranties (Bluebon v Ageas).

A large number of insurance and reinsurance disputes (including political risks, trade credit risks, aviation risks and KNR) are resolved by means of arbitration. Very substantial claims under policies of liability and commercial property insurance, as well as treaty reinsurance claims and claims relating to the reinsurance of mass insurance products, continue to be dealt with by international arbitration under the aegis of most arbitral institutions (including LCIA, ICC, SIAC and HKIAC). Numerous claims are also dealt with by ad hoc arbitration.

There continue to be numerous Bermuda Form arbitrations dealing with substantial disputes. Arbitration, in particular international arbitration, has proved to be a popular choice of forum for insurance cases. This is an international practice in which the Insurance Bar continues to play a major part.

Many insurance disputes are commercial or international in character. There remain a large number of cases concerning consumer insurance claims, focusing mainly on motor insurance, personal injury claims and household policies. There have also been numerous small business claims under property, business interruption and professional indemnity policies. Indeed, professional indemnity claims both against insurers and insurance brokers continue to occupy the work of the Insurance Bar.

Most insurance and reinsurance disputes continue to be litigated in the Commercial Court. The Queen’s Bench Division and the Technology and Construction Court continue to hand down decisions in insurance cases, with an emphasis on commercial property, liability, professional indemnity and consumer insurance policies. A number of appeals have been heard in the Supreme Court and the Court of Appeal in insurance and reinsurance cases over the past year, with important legal developments being recorded in the process. The development of insurance law in light of the new legislation is awaited with interest.