Insurance Law Monthly

The interpretation of the “follow the settlements” clause in English law is well settled: the reinsurer is obliged to follow the reinsured’s settlement so long as the settlement is bona fide and businesslike and the loss is covered by the terms of the reinsurance agreement. In the United States, the “follow the fortunes” clause is used interchangeably with the “follow the settlements” clause to express a similar interpretation that the reinsurer cannot second-guess the reinsured’s settlement made in good faith.

It is settled law that a “basis of the contract” clause in an insurance proposal deems every answer given by the assured to be a warranty. Such clauses have featured very little in cases in recent years, and they have long been abandoned in consumer cases. However, they may still be effective as is shown by Genesis Housing Association Ltd v Liberty Syndicate Management Ltd [2012] EWHC 3105 (TCC), in which Akenhead J was faced with a basis clause but tempered by seemingly contradictory policy terms. As is seen below, the learned judge gave primacy to the basis clause.

In Clothing Management Technology Ltd v Beazley Solutions Ltd [2012] EWHC 727 (QB) HHJ Mackie QC was faced with a variety of issues of marine insurance law, rather curiously involving a non-marine risk but written in marine form. The case is analysed by Tom Asquith of Four New Square.

In Clothing Management Technology Ltd v Beazley Solutions Ltd [2012] EWHC 727 (QB) HHJ Mackie QC was faced with a variety of issues of marine insurance law, rather curiously involving a non-marine risk but written in marine form. The case is analysed by Tom Asquith of Four New Square.