The court considered a proposal form for a jeweler’s block policy as filled in by the insured or his agent which incorrectly identified only one previous loss although there were several previous losses. The form stated that ‘It is understood that this proposal will serve as the basis of the contract if a policy is issued’.
Held: Scrutton LJ said: ‘The second point [taken by the insured’s Counsel] was that the answers were not in any way incorporated with the policy so that the correct answering was a condition precedent. The answer to that appears to be at the bottom of the form: ‘This proposal is to serve as the basis of the contract’; and, if so, the truth of the statements in it is equally the basis of the contract.’
Lord Sankey said: ‘The same law was laid down by the Court of Appeal by Lord Esher . . in Hambrough v Mutual Life Insurance Company of New York 72 L.T. 140, which was decided as far back as 1895. There the words in the proposal were not quite the same as the words in the proposal in the present case, but the Lord Chief Justice in the Court below said in his judgment that in his view the proposal was made the basis of the contract, and that the legal effect of the express warranty of the truth of the statements in the proposal is that if any of the statements is untrue the policies cannot be enforced by anyone. He was therefore following almost exactly the law laid down in the House of Lords by Lord Eldon in 1815 in the Newcastle Fire Insurance Company v Macmorran and Co., 3 Dow (H.L.) 255. I only refer to those cases to show that the law in this country at any rate has been settled in that respect for, it appears to me, over a century.’
Scrutton, Sankey LJJ
(1928) 32 Ll L Rep 98
England and Wales
Cited – Genesis Housing Association Ltd v Liberty Syndicate Management Ltd CA 4-Oct-2013
The housing association was to develop an estate of social housing, supported by an insurance guarantee. The insurance proposal contained a clause stating that the information in the proposal was to form the basis of the policy, and that the policy . .
Cited – Genesis Housing Association Ltd v Liberty Syndicate Management Ltd TCC 8-Nov-2012
Insurers had rejected a claim under the policy, saying that the proposal form had included a basis of insurance declaration warranted by the proposer, and that since it had named a main contractor different to the one named, there was no liability . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 October 2021; Ref: scu.512348