I

ntr
oduct
ion

I
nsur
ancei
sar
iskmanagementt
hatenabl
ebusi
nesst
otr
ansf
ert
her
iskofal
osst
o
an i
nsur
ance company.Nat
ure and scope ofi
nsur
ance cont
ract
,the nat
ure of
i
nsur
ancecont
ractbasedont
hemat
terl
i
ket
hef
oll
owi
ng;
-asuncer
tai
nwher
ethe
eventmus
tbe unknown t
othe par
ti
est
hemsel
vesand i
n case one par
tyhas
knowl
edge t
othe event
,thatcont
ractshal
lnotbeen f
orced. The pur
pose of
i
nsur
ancecont
ractmus ,consi
tcover der
ati
on,uncer
tai
ntyoft
heeventandst
andar
d
1
f
orm cont
ract
.
2
Jupi
terGener
alI
nsur
anceCovKasandaCot
tonCo.

I
nthi
scase,t
he r
espondentcl
aimst
o have ent
ered i
nto or
alcont
ractwi
tht
he
appel
l
antt
ocoverl
ossoncashi
ntr
ansi
t.Att
heoccur
renceofl
osst
her
espondent
cl
aimed t
he i
ndemni
ty,howevert
he appel
l
antasser
ted t
hatt
he cont
ractwasa
wr
it
tenoneofwhi
chl
ateri
twaspr
ovedt
obenott
rue,si
ncet
heycl
aimedsot
hey
addedt
hatt
hecont
ractwasexcl
udedsomel
i
abi
l
it
ysuchast
hef
ail
ureofpar
ti
est
o
r
eferadi
sput
etoar
bit
rat
ion.Thequest
ionwasonexi
stenceofcont
ractwher
ethe
Cour
thel
dthatt
her
ewasanor
alcont
ractbet
weent
hepar
ti
es.Thus,t
hedef
endant
wassubj
ect
edt
ocompensat
ionbyt
heappel
l
antasor
der
edbyt
hecour
t.

Undert
his case,t
he aspectofnat
ure and scope ofi
nsur
ance cont
ractwas
obser
vedundervar
iousper
spect
ives.

Thecour
test
abl
i
shedt henat
hatt ureofi
nsur
ancecont
ractonf
ormal
i
ti
esi
ncl
udes
al
soor
alcont
ractt
hati
ntendedt
obi
ndt
hei
nsur
erandi
nsur
edunderpur
poseof
cover
ingt
hel
ossesovert
hesubj
ectmat
terofi
nsur
edbyt
hei
nsur
er.Thej
udgment
al
socement
edt
hatevenor
alcont
ractunderi
nsur
ancewi
l
lhavet
hesamel
egal
ef
fectascompar
edt
owr
it
tenone.Thi
sposi
ti
oni
scont
rar
ytoourl
egalsyst
em on
t
hel
aw gover
ningi
nsur
ancewher
eundersect
ion3oft
heI
nsur
anceActr
equi
ret
he
3
pol
i
cyt
obei
nwr
it
ingandnotot
her
wise.

heaspectofscope,t
Ont hecour
tint
hiscasepl
acet
heposi
ti
ont
otheef
fectt
hatt
he
1
Vaughan,E&Vaughan,T(
2008)
,10thed.Fundament
alsofRi
skandI
nsur
ance
2
[
1966]1EA252(CAK)
3
[
CAP394R.E.2009]
val
i
dinsur
ance cont
racti
stoi
ndemni
fyt
he i
nsur
ed based on t
he t
erms and
condi
ti
onsofsuchpol
i
cyi
ssuedbyt
hei
nsur
er.Asobser
vedi
nther
ecent
lycas
eof
Sol
eraHol
dings,I
nc.v.XLSpeci
alt
yIns.Co,ofwhi
chi
twasi
nsi
stedt
hati
ndemni
ty
4
woul
d depend on t
he t
erms oft
he pol
i
cy agai
nstt
he i
nsur
ed. Anot
heri
ssue
di
scussed wason pr
act
ice ofpar
ti
es t
o a cont
ractas a meanst
o pr
ove t
he
exi
stenceofsuchcont
ract
.

Anot
herkeyi
ssuedi
scussedi
nthi
scasei
nrel
ati
ont
onat
ureandscopei
sthatt
he
t
ermsandcondi
ti
onsoft
hepol
i
cyshal
lnotbi
ndt
hei
nsur
edunl
esst
heymadet
obe
cl
eart
ohi
m.I
twasquot
edt
hat‘wher
eaper
sonhascont
ract
edf
ori
nsur
anceon
usualt
ermsandcondi
ti
ons,i
tcoul
dnotbesai
dthathewasnotboundbyanysuch
t
ermsandcondi
ti
onsunt
ilt
heyhavebeenmadeknownt
ohi
m’.Ont
hismat
ter
,the
cour
tal
sor
efer
redt
othecaseofReCol
eman’sDeposi
tor
iesLt
d,andt
heLi
feand
5
Heal
thAssur
anceAssoci
ati
on.

6
Mar
ianneI
ngr
idWi
nthervs.Ar
bonLangr
ish&Sout
her
nLt
d.

I
nthi
scase,t
her
eisi
ssuet
hatdi
scussedi
nrel
ati
ont
othenat
ureandscopeof
i
nsur
ancecont
ract
;

Thei
ssuer
egar
dingt
orul
eandposi
ti
onofi
nter
medi
aryt
hati
sabr
oker
.Int
hiscase,
t
hebr
oker(
Mr.Cowmeadow)whowor
kedonbehal
fofhi
smanagerhadadut
yto
r
enew i
nsur
ancepol
i
cyt
hati
saper
sonalacci
dentpol
i
cy,whi
chwoul
dhaveent
it
led
assur
ed t
o some amountofmoneyupont
he occur
rence ofaneventofdeat
h
r
esul
ti
ng f
rom bodi
l
yinj
uri
ng.However
,thebr
okerf
ail
ed t
orenew t
hepol
i
cyas
agr
eedbet
weent
hem.Gener
alr
ulei
sthat
,anymi
stakeoractoranyar
rangement
donebyt
hebr
okert
reat
edasi
fhi
smanagerdoesi
t.Ther
efor
e,i
nthi
scas
ethe
cour
thel
dthat
,ther
elat
ionshi
pofi
nsur
ancebr
okerandassur
edaswel
lbet
weent
he
def
endantandt
heownergaver
iset
oadut
yofcar
eont
hepar
tofdef
endantt
oa
cont
ract
.Thecour
tal
sohel
dthatt
hedef
endanthadnotsuf
fi
cient
lydi
schar
gedt
he

4
213A.
3d1249(Del.Super
.Ct
.201
9).
5
[1
907]2K.B798.
6
[1
966]1EA292(HCK)
dut
yofcar
ecast
eduponi
tandwasanswer
abl
efort
hedamaget
hatwasr
esul
ted.

Thenat
ureandscopeofi
nsur
ancedependsont
het
ypesofi
nsur
ancet
endt
ocover
,
i
nthecaseofAtDevShar
maTr
adi
ng asSeemaDr
ivi
ng SchoolvTheHome
I
nsur k7.
anceCompanyNewYor

I
nthi
scasepol
i
cyofi
nsur
ancecover
ed(
li
feandacci
dentI
nsur
ance)
,wher
ethe
pol
i
cyhol
derent
eredi
ntocont
ractwi
tht
hecompany,buti
nti
meofmaki
ngcont
ract
t
hepol
i
cyhol
derwer
enotst
atecl
ear
lywhower
ebecover
ed,

Thef
act
soft
hiscasewas,oneofi
nst
ruct
ors(
MohamedSadi
ck)sust
ains
eri
ous
i
njur
iesf
rom Mombosar
oadwhenpassi
ngf
rom Nai
robit
oEmbasakiai
rpor
t.
And
t
hepl
aint
if
f(pol
i
cyhol
der
).

Thecasehast
hef
oll
owi
ngi
ssues

Thei
ssuei
swhet
hert
heownerofschool
isent
it
ledt
ocl
aim undert
hepol
i
cy.

Whoi
sinsur
ed?

Whohasi
nsur
abl
eint
erestatt
het
imeofl
ossnoti
nmaki
ngcont
ract
?Int
her
egar
d
oft
hecase,t
hecont
ractt
hei
ssuedi
scussedi
sthatnoonecanbenef
itwher
ehave
noi
nter
est
,al
somor
alobl
i
gat
ionowedt
otheassur
edar
enotsuf
fi
cientt
osust
ainan
i
nsur
abl
eint
erest

Ther
efor
e,t
hecour
tbaseont
hef
actempl
oyerhasnoi
nter
estl
egalorequi
tabl
ein
t
hepol
i
cyofl
i
fei
nsur
ance.I
ndr
aft
ing t
hecont
ractwer
ecl
ear
lyt
hatpl
aint
if
fas
(
empl
oyer
)fort
henamedempl
oyees;si
mpl
yhasi
nsur
abl
eint
eresti
nthesubj
ect
mat
teroft
hepol
i
cy.Mor
eover
,ther
enot
rusti
ncr
eat
ingt
hepol
i
cyandcompanyt
o
acceptpr
emi
um wi
thnoi
ntent
ioni
nanyci
rcumst
anceofhonor
ingt
hepol
i
cy.

Jupi
terGener
alI
nsur
anceCoLi
mit
edvsRaj
abal
iHasham andSons

I
nthi
scaset
hedi
sput
ear
iseont
hei
ssueoft
heval
i
dit
yoft
heI
ndemni
tyWar
rant
yif
canbeappl
i
cabl
eont
hei
nsur
ancecont
ract
.TheI
nsur
anceCompanycl
aimt
hat
,

7
[
1966]1EA8(
sck)
t
hedr
iverwasdr
unkwhendr
ivent
hecarandhet
akecarwi
thoutt
heconsentoft
he
ownerwhi
chBr
eachoft
hewar
rant
ypr
int
edont
hebackoft
hebackoft
hepol
i
cyof
i
nsur
anceasf
oll
ow ‘i
tisher
ebyunder
standsandagr
eedt
hatt
hecompanywi
l
l
notber
esponsi
blef
ort
heacci
dent /
oranydamageand/
orcl
aim ofanynat
ure
whent
hevehi
cl
eisdr
ivenbyaper
sonwhoi
snotsoberand/orundert
he i
nfl
uence
ofal
cohol
dri
nk,l
i
qui
dordr
ugs”

I
ssuei
swhet
hert
hatwar
rant
ycanbeval
i
dont
hecase

Hel
d That
,Taki
ng an vehi
cl
e unl
awf
ull
ythe dr
iverhad commi
tt
ed an actof
conver
sioncont
rar
ytoS.284,oft
hepenalcodewhi
chwasamal
i
ciousactt
he
mal
i
ciousactwasani
nsur
edr
iskmat
eri
ali
zi
ngatt
het
imeofconver
siononwhen
nei
thert
hewar
rant
ynorot
her
,except
ionappl
i
edi
twasal
socont
inui
ngactand
i
ncl
udedt
heactr
espondedwhohadl
ostt
hevehi
cl
ewer
eent
it
ledt
orecoverunder
t
hepol
i
cyandt
heappeal
di ssed8
smi

Thescopet
hecont
ractcovert
hemot
orvehi
cl
eInsur
ancewhi
chcover
edbyt
he
di
ff
erentwar
rant
y

TheNat
urewasont
hei
ndemni
tywhent
hel
ossoccur
sbet
weent
hei
nsur
erand
i
nsur
ed.
9
ThecaseofNasserMohamedOmervsPr
udent
ialAssur
anceCoLt
d.

I
nthi
scase,t
heappel
l
antwhowast
heownerofOpel
mot
orcarcl
aimedt
hathewas
ent
it
ledani
ndemni
tyf
rom t
her
espondent
,pr
udent
ialassur
anceco.l
tdagai
nstl
oss
ofhi
smot
orcarwi
thi
nthemeani
ngofmot
ori
nsur
ancepol
i
cy.TheoneMohs
enAl
i
Sal
ehwhowasanempl
oyeeoft
heappel
l
ant
,ont ng3rd December1
heeveni 962at
9:
30or1
0pm dr
ovet
hecarof
fther
oadont
otheseashor
ewher
ethecarwas
damagedbecauseofi
mmer
sioni
nsal
twat
er,t
hemat
terbecomet
otheknowl
edge
oft
heappel
l
antwher
eher
epor
tedt
other
espondent
.Af
tersomei
nvest
igat
ions,t
he
r
espondentcompanyr
epudi
atedt
hel
i
abi
l
it
ybecauset
heacci
dentwasnotwi
thi
n
t
hemeani
ngofacci
dent
alcol
l
isi
ont
omeant
hatt
heappel
l
antwoul
dnotbeent
it
led

8
{1
960}EA592[
CAN]
9
[1
966]1EA79
t
hecl
aimsofi
ndemni
ty.

Thecour
thel
dtot
heef
fectt
hatt
heent
ranceoft
hecari
ntot
heseawat
erwasnot
wi
thi
nthemeani
ngof“acci
dent
alcol
l
isi
on” andundert
het
ermsoft
hepol
i
cy,t
he
appel
l
antwasnotent
it
ledt
ocl
aim anyi
ndemni
tyf
ort
hel
ossoft
hecar
.Ther
eason
bei
ng,t
hatt
heent
ryoft
hecari
ntot
heseawasnotacci
dent
alasi
thadbeendr
iven
i
ntent
ional
l
ybyt
he empl
oyee oft
he appel
l
anti
ntot
he sea and t
he actoft
he
empl
oyeemustber
egar
dedast
heactoft
heappel
l
ant
,event
hought
heappel
l
ant
hadnoknowl
edgeoni
t.

Regar
ding t
he nat
ure and scope ofi
nsur
ance cont
racti
nthe case of Nasser
MohamedOmerv Pr
udent
ialassur
ancecompanyCo.Lt
d,asnat
ureofi
nsur
ance
cont
ractdependsont
henat
ureoft
her
iskr
equi
redt
obepr
otect
ed,i
nthi
scaset
he
r
iskwassai
dtoexi
stonl
ywhenr
esul
tedf
rom acci
dent
alcol
l
isi
on.I
tst
atedt
hat
,
“acci
dent
alcol
l
isi
on” doesnoti
ncl
udeacol
l
isi
on,whi
chhappensbecauseofan
acti
ntent
ional
l
ydesi
gnedt
ocauseacol
l
isi
onf
ordamagi
ngt
hevehi
cl
e,wher
eit
ext
endedt
othemot
ori
nsur
ancepol
i
cies.

Concl
usi
on

I
ntheabovecasest
hei
ssueswhi
chdi
scussedi
nrel
ati
ont
othenat
ureandscopes
ofi
nsur
ancewer
erel
yonwher
etheval
i
dit
yofi
nsur
ancecont
ractdependsont
he
caset
ocase.Howeverasobser
vedi
nvar
iouscases,par
ti
est
oinsur
ancecont
ract
have an obl
i
gat
ionst
o di
schar
ge t
hei
rdut
iesi
nrespectofpr
inci
plesgover
ning
i
nsur
ance.
REFERENCES

Books

 Vaughan,E & Vaughan,T (

Laws

 TheI
nsur
anceAct
,[CAP394R.
E.2009]
.

 EALawRepor
tof1
966.

 EALawRepor
tof1
960.