Renewal of Policies - Incorporating Exception Clauses

(Great North Eastern Railway v Avon Insurance plc, forthcoming in [2001] Lloyd’s Rep IR)

The informal process by which commercial insurance contracts are sometimes renewed may sometimes leave confusion as to the identity of the applicable policy wording. Such a problem arose in Great North Eastern Railway v Avon Insurance plc, forthcoming in [2001] Lloyd’s Rep IR , in which renewal of cover had been effected by means of a short exchange of faxes. The decision of the Court of Appeal highlights the limits both of the parole evidence rule and also of any argument that exception clauses within an insurance policy might be repugnant and thus of no or limited effect. Jeremy Stuart-Smith QC and David Turner comment on the Court of Appeal’s approach.