Insurance Law Monthly

The use of fronting is an established means of bringing to the London market overseas risks which could not be insured by London market insurers directly. Typically a local insurer insures the risk in its own name and then reinsures anything up to..

In Tesco Stores Ltd v Constable [2007] EWHC 2088 (Comm), discussed in the March 2008 issue of Insurance Law Monthly, Mr Justice Field confirmed that a public liability policy is targeted to provide an indemnity to the assured against claims which may be made against him in tort, or alternatively against claims which may be made against him for breach of contractual duty which could also have been brought in tort. The cover is not designed to indemnify the assured against liabilities which he has voluntarily undertaken in a private contact with a third party which have no tortious counterpart. The Court of Appeal, [2008] EWCA Civ 362, has upheld the judgment on Field J in more or less the same terms as it was handed down.

An underwriting agent is authorised to write business for its insurer principals. Various terms of the binding authority conferring that authorisation on the underwriting agent will generally be expressed to be continuing beyond its termination, eg, accounting requirements and confidentiality. The question raised by Temple Legal Protection Ltd v QBE Insurance (Europe) Ltd [2008] EWHC 843 (Comm) was whether, on the proper construction of the binder in question, the underwriting agent had retained the authority to conduct claims-handling and other run-off activities following the withdrawal of its authority to write further business.

In Reilly v National Insurance & Guarantee Corporation Ltd [2008] EWHC 722 (Comm) Mr Justice Burton was asked to resolve preliminary issues on the meaning of an exclusion in a product liability policy issued to an assured whose business was installing fire detection and protection systems. The case was decided on assumed facts. The effect of the judgment is that: (a) an overall system can be machinery even though its constituent parts are not;and (b) a product liability policy is designed to protect the assured against liability for damage caused by defective products and not against liability in respect of mere equipment failure.

Marine policies often contain provisions that require the vessel to be crewed at all times. In the case of a large vessel with a large crew, that type of clause is not particularly problematic. The position is rather different if the vessel is a small one and there are very few crew members. Pratt v Aigaion Insurance Company SA, The Resolute [2008] EWHC 489 (Admlty) illustrates that a crewing provision is, subject to common sense limits, to be construed as meaning what it says even though compliance with it by the assured might have been all but impossible.

The question referred to the European Court of Justice in Commission of the European Communities v Republic of Ireland Case T-211/07 concerned the compatibility of the Motor Insurers Bureau of Ireland Agreement with the requirements of the European Union’s motor insurance directives as they affect passengers injured in uninsured vehicles.