Page 60 - Insurance Times December 2022

Insurance Caselaws

Constituents of a Marine Insurance Policy? seeks to indemnify the insured only against such losses that
United India Insurance Co. Ltd. are caused by certain perils arising under normal conditions
whose effects are statistically estimated. The Court observed
vs.
that exceptions are inserted to exempt the liability of the
Levis Strauss (India) Pvt. Ltd.
insurer for which it would be otherwise liable. Excepted
Civil Appeal No. 2955 of 2022
clauses are inserted ex abundanti cautela in insurance
policies to inform the insured that losses attributable to
Court in the course of its judgment, inter-alia, examined
excepted causes will not be indemnifiable. Since the
expressions under the Marine Insurance Act, 1973 (“MI Act”),
exception, in this case, was neither too wide nor in conflict
namely, marine adventure, maritime peril referred to in
with the main purpose of the insurance policy, the claim was
marine adventure and marine policy. It was observed that
held to be correctly repudiated by the insurer, having regard
Section 4 of the MI Act, deals with mixed marine and land
to the specific exceptions in the policy.
risks. It inter-alia, enables coverage - through express terms,
or by usage of trade - extension of marine policies so as to
How far reliance can be placed on definition of
protect the assured against losses on inland waters or on any
land risk which may be incidental to any sea voyage. The words in specific statutes when the insurance
Supreme Court relied on its earlier judgment in New India policy itself defines those words?
Assurance Co. Ltd. v. Hira Lal Ramesh Chand and Ors. 2008
Narsingh Ispat Ltd.
(10) SCC 626, where it was held that an insurance cover
vs.
extending 'warehouse to warehouse' meant that the Oriental Insurance Company Ltd. and Others.
consignments are covered by insurance not only during the
Civil Appeal No. 10671 of 2016
sea journey, but beyond as stated in the policy i.e. during
transit from the time it leaves the consignor's warehouse till The insured had taken a Standard Fire and Special Perils Policy
it reaches the consignee's warehouse. In the instant case, since from the insurer. The policy covered the loss caused to the
there was a warehouse-to-warehouse transit clause and property of the insured on account of fire, lightning, explosion,
certain other stipulations, which stated that the policy covers riots, strike etc. A claim was lodged by the insured on account
both marine and other risks, the policy was held to be a of 50-60 antisocial people with arms and ammunition, who
marine insurance policy which comprehensively covered entered the factory premises of the insured and caused
voyage, transit, transportation and warehouse perils. What substantial damage to factory, machinery and other
is material is not whether the insurable event occurred during equipment. According to the insured, the object of the
the voyage; rather, the focus is on the nature of the cover. incident was to terrorise the management of the insured.
Insurer repudiated the insured’s claim by placing reliance on
Role of exceptions in an General Insurance the exclusion clause in the policy regarding loss or damage
caused by the acts of terrorism, which was defined under the
policy?
policy. The Supreme Court held that the insurer had failed to
Shivram Chandra Jagarnath Cold Storage and Ors.
discharge the burden of bringing the case within the four
vs.
corners of the exclusion. When the policy itself defines the
New India Assurance Company Limited and Ors.
acts of terrorism in the exclusion clause, the terms of the policy
I(2022)CPJ138(SC) being a concluded contract will govern the rights and liabilities
of the parties. Therefore, the parties cannot rely upon the
In this case, the insurance claim of the Insured arose under definitions of 'terrorism' in various penal statutes since the
a deterioration of stock policy which covered the stock of exclusion clause contains an exhaustive definition of acts of
potatoes stored by the insured in cold storage. The surveyor terrorism. Since the policy covers explicitly a liability arising
observed that the claim should be rejected in view of out of the damage to the property of the insured due to riots
exceptions to the policy. Thus, the insurer disclaimed any or the use of violent means, therefore, there was no warrant
liability. The Supreme Court discussed the role of exceptions for applying the Exclusion Clause. Accordingly, the Insurer’s
in an insurance policy, wherein it was opined that an insurer decision to repudiate the policy was held to be unsustainable.

52 December 2022 The Insurance Times