WARRANTIES - EFFECT OF BREACH OF WARRANTY

(Printpak v AGF Insurance Ltd, January 1999, unreported)

It is clear from a series of first instance decisions on warranties in the context of professional indemnity insurance that the decision of the House of Lords in The Good Luck [1992] 1 AC 233 applies to marine and non-marine insurance alike, with the result that as soon as an assured is in breach of warranty the risk under the policy automatically determines and no claim is possible against the insurers for any post-breach loss. This is so stated by section 33(3) of the Marine Insurance Act. That proposition is not the most attractive, particularly where it applies to consumer policies and the breach of warranty has little if anything to do with the form of loss, and the courts have over the years sought to avoid a result which they plainly regard as unjust. The latest development in the law on this matter is the decision of the Court of Appeal in Printpak v AGF Insurance Ltd, January 1999 (forthcoming in [1999] Lloyd’s Rep IR).