Insurance Law Monthly

Zurich Professional Ltd v Brown [2010] EWHC 3300 (Ch) raised a question of the interpretation of a professional indemnity polity taken out by the assured. The policy covered the assured for liability incurred in the course of his private legal practice. The question was whether he was carrying on such a practice.

Documents prepared by or for a party in anticipation of litigation, and for the purpose of that litigation, are protected from disclosure by litigation privilege. In Axa Seguros SA de CV v Allianz Insurance plc [2011] EWHC 268 (Comm) the important question discussed by Christopher Clarke J was whether reports commissioned by reinsurers into the amount of loss suffered by the assured were protected by litigation privilege when those reports subsequently disclosed that the reinsured had failed to comply with policy conditions. The learned judge ruled that privilege is available only where the primary purpose of the document being prepared is anticipated litigation, so that in the present circumstances there was no litigation privilege.

Section 19 of the Financial Services and Markets Act 2000 imposes an authorisation requirement on persons who carry on insurance business in the United Kingdom. If there is contravention of this provision a variety of civil and criminal consequences follow, including the ‘nuclear option’ that the Financial Services Authority may petition the court for a winding up order. Petitions were presented in Re Digital Satellite Warranty Cover Ltd [2011] EWHC 122 (Ch) against companies offering warranties on satellite television equipment. The issue was, were they carrying on insurance business at all?

The lengthy judgment of Flaux J in Synergy Health (UK) Ltd v CGU Insurance plc [2010] EWHC 2583 (Comm) was largely concerned with factual evidence. However, there are important points of principle made by the learned judge: in relation to misrepresentation, it was held that a statement made during the currency of the policy was to be treated as a representation for the purposes of renewal; in relation to non-disclosure, the court discussed the various forms of waiver of disclosure; in relation to both misrepresentation and non-disclosure, the court considered the issues of materiality and inducement; and, in relation to business interruption, the judgment discusses the measure of indemnity.