An international engineering company had several layers of professional indemnity insurance. The top later did not cover claims originating in the US or Canada. The several insurers now disputed apportionment of liability between them. The appellants (Teal) appealed against decisions below that it was not entitled to select which claims to apportion to which policies, and that claimas must be apportioned to the successive layers as they fell.
Held: The appeal failed. Once the insured’s liability was settled, whether by agreement, judgment or award, the insured incurred expenses, within the scope of a liability policy A claim arose under the policy. That claim would either exhaust the policy cover entirely or pro tanto.
However, the insured may choose not to notify the claim to the insurers, and the policy would not thereby be exhausted.
Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption, Lord Toulson
[2013] UKSC 57, [2014] Lloyd’s Rep IR 56, [2013] WLR(D) 332, [2013] 2 CLC 390, [2013] 4 All ER 643, [2013] BUS LR 109, [2013] 2 All ER (Comm) 1009, UKSC 2012/0014
Bailii, WLRD, Bailii Summary, SC Smmary, SC
England and Wales
Citing:
At First Instance – Teal Assurance Company Ltd v W R Berkley Insurance (Europe) Ltd and Another ComC 31-Jan-2011
The parties disputed the proper construction and the operation of an excess reinsurance policy of professional liability insurance, and more specifically about how it is determined whether the ‘excess point’ that triggers the reinsurance cover has . .
Appeal from – Teal Assurance Company Ltd v WR Berkley Insurance (Europe) Ltd and Another CA 15-Dec-2011
. .
Cited – Post Office v Norwich Union Fire Insurance Society Ltd CA 1967
A contract of insurance provided an indemnity for ‘all sums which the insured shall become legally liable to pay as compensation in respect of loss of property’. The claim was by the Post Office against a contractor, Potters, for damaging one of . .
Cited – Bradley v Eagle Star Insurance Co Ltd HL 1989
Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under . .
Cited – North River Ins Co v American Home Assurance Co 15-Mar-1989
California Court of Appeals . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .
Cited – Sprung v Royal Insurance (UK) Ltd CA 1999
An insured cannot recover damages at large for an insurer’s failure to pay. Interest on sums due under a policy is adequate compensation for late payment; this is so, even if an insurer deliberately withholds sums which he knows to be due under a . .
Cited – Ventouris v Mountain CA 1991
It is in the interests of the state which provides the court system and its judges at taxpayers’ expense that legal advisers should be able to encourage strong cases and discourage weak cases. ‘It is the protection of confidential communications . .
Cited – Apostolos Konstantine Ventouris v Trevor Rex Mountain, The Italia Express No 2 QBD 1992
A contract of marine insurance is not one to provide peace of mind or freedom from distress.
An assured cannot recover for losses caused by the insurer’s wrongful refusal to pay a valid claim. Interest on the sum is an adequate compensation. . .
Cited – Cox v Bankside Members Agency Ltd and Others QBD 27-Jan-1995
Some agents had policies against which there were likely to be various calls, either because several claims were being pursued against the same agents by different Lloyd’s Names, or because the policies were group policies covering several agents . .
Cited – Cox v Bankside Members Agency Ltd and Others CA 16-May-1995
Successful Lloyds names were entitled to enforce their claims in the normal time sequence. The transfer of the rights of the insured against the insurer under section 1(1) the 1930 Act takes place on the event of insolvency, even if the insured’s . .
Cited – Charter Reinsurance Co Ltd v Fagan and Others CA 6-Nov-1995
Liability of re-insurers arises on insurers becoming liable to pay, not payment. . .
Cited – Charter Reinsurance Co Ltd v Fagan and Others HL 24-May-1996
The re-insurers appealed against a finding that they were liable to make payment under a contract which required them to pay ‘sums actually paid.’ They said that the company having become insolvent, no payment would in fact be made.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 18 November 2021; Ref: scu.514221