The employer’s liability policy contained a condition precedent that the insured should take reasonable precautions to prevent accidents and disease. The company sought to rely upon the clause to avoid liability.
Held: ”Reasonable’ does not mean reasonable as between the employer and the employee. It means reasonable as between the insured and the insurer having regard to the commercial purpose of the contract, which is inter alia to indemnify the insured against liability for his (the insured’s) personal negligence. That, too, is established by the case which I have cited. Obviously, the condition cannot mean that the insured must take measures to avert dangers which he does not himself foresee, although the hypothetical reasonably careful employer would foresee them. That would be repugnant to the commercial purpose of the contract, for failure to foresee dangers is one of the commonest grounds of liability in negligence. That, too, is established by the case which I have cited. Obviously, the condition cannot mean that the insured must take measures to avert dangers which he does not himself foresee, although the hypothetical reasonably careful employer would foresee them. That would be repugnant to the commercial purpose of the contract, for failure to foresee dangers is one of the commonest grounds of liability in negligence. What, in my view, is ‘reasonable’ as between the insured and the insurer, without being repugnant to the commercial object of the contract, is that the insured should not deliberately court a danger, the existence of which he recognises, by refraining from taking any measures to avert it.’
Judges:
Diplock LJ
Citations:
[1967] 1 WLR 898
Jurisdiction:
England and Wales
Cited by:
Cited – Blackburn Rovers Football and Athletic Club Plc v Avon Insurance Plc, Eagle Star Insurance Company Ltd, AGF Insurance Ltd IC Insurance Ltd ComC 15-Nov-2004
The claimant football club insured its players through the defendants. A footballer injured himself in training and his career was finished. The insurers rejected the claim, and relied upon exception clauses, saying that the true cause was a . .
Cited – Channon (T/A Channon and Co) v Ward QBD 12-May-2015
The claimant had lost significant sums through his accountancy practice, but now claimed that his insurance broker, the defendant had negligently failed to renew his professional indemnity policies, even though he had supplied policy numbers to the . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 12 April 2022; Ref: scu.219696
