Insurance Law Monthly

In Ristorante Ltd (t/a Bar Massimo) v Zurich Insurance plc [2021] EWHC 2538 (Ch) there were two questions before Snowden J: had the assured misrepresented material facts by the answer given to a question about previous insolvencies; and, in the absence of misrepresentation, had the insurers waived disclosure of information relating to insolvencies by asking a limited question on the matter. The facts arose after the Insurance Act 2015 had come into force, so the duty of fair presentation was under consideration, but the law had not in any way been changed from the position under the Marine Insurance Act 1906 by the 2015 Act and the judgment makes no reference to the new (or indeed the superseded) legislation.

There is relatively little authority on the operation of the Consumer Insurance (Disclosure and Representations) Act 2012, in particular the consumer’s obligation to take reasonable care not to make misrepresentation and the appropriate remedy. The legislation is very clearly drafted, and the vast majority of cases will turn on their facts. The only real point of law in Jones v Zurich Insurance plc [2021] EWHC 1320 (Comm) is that an insurer who wishes to argue that a misrepresentation was deliberately or recklessly made – thereby giving an automatic right to the insurers to avoid the policy – has to be pleaded specifically.

Allsop CJ in the Federal Court of Australia has, in Star Entertainment Group Ltd v Chubb Insurance Australia Ltd [2021] FCA 907, given an answer to a vital question affecting recovery for business interruption losses in the wake of Covid-19, namely: is the virus a catastrophe? The point arose in the context of an ordinary business interruption policy, but the decision will be of huge interest to the reinsurance market, where coverage is for property and catastrophe. Can there be a catastrophe where there is no property damage?

In Equitas Ltd and Another v Sande Investments Ltd and Others [2021] EWHC 631 (Comm), Leigh-Ann Mulcahy QC, sitting as a Deputy High Court Judge, considered the duties and liabilities of a sub-agent appointed by brokers to collect reinsurance recoveries on behalf of Lloyd’s Syndicates in run-off. The main points to arise from the decision is that sub-agents with such limited duties are not subject to the regulatory regime applicable to Lloyd’s brokers and that the duties are owed to the appointing brokers and not the Syndicates.