NU the insurer of a consequential loss insurance policy, appealed against the decision, on a claim brought by G, the owners of a property under redevelopment, which had suffered a fire as to G’s resultant loss of rental income from the property. The fire destroyed architects’ drawings which were not insured and caused a substantial delay in the development. The issue was whether a proviso contained in G’s policy, that at the time of the damage the claimant must have ‘an insurance covering the interest of the insured in the property at the premises against such damage’ could be construed as giving G an insurable interest in the Architects drawings even though they were not the owners.
Held: The appeal was dismissed. The word ‘interest’ contained in the proviso should be construed in context, depending on the insured’s relation to the damaged property. An insured could recover if he had rights in existence at the time of the loss which were affected by the damage e.g. profits from a forward sale. However, the Architects’ drawings were not property in which he had a personal interest at the time of the fire. They were the property of the Architects, and G were under no obligation to insure themselves against their loss.
Such loses through delay were not recoverable.
Auld LJ said: ‘the nature of the insurable interest in each case must depend on the type of cover in issue’.
Auld LJ, Neill LJ
Ind Summary 22-Jan-1996, Times 12-Jan-1996, [1996] 1 Lloyds Rep 614, [1996] 2 All ER 487
England and Wales
Citing:
Approved – Sharp v Sphere Drake Insurance plc (The Moonacre) 1992
S, a retired businessman, had bought a vessel and insured it in his name, but registered it in the name of company, R. In the winter, the boat was laid up, but occupied by a workman who maintained it and kept it secure. The boat was destroyed by a . .
Cited – Lucena v Craufurd HL 1806
Before the declaration of war, against the United Provinces, His Majesty’s ships took possession of several ships belonging to Dutch East India men, and took them to St Helena. The Commissioners then insured the ships for their journey from St . .
Cited by:
Cited – Feasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
These lists may be incomplete.
Updated: 11 July 2021; Ref: scu.80870