The Terms of Insurance Contracts - Implying terms into insurance

(Mabey and Johnson v Ecclesiastical Insurance Office, July 2000, forthcoming in Lloyd’s Rep IR)

The need for all of the intended terms of an insurance or reinsurance contract to be clearly agreed by the parties at the outset has been stressed by the courts on numerous occasions. Unfortunately, the procedures for the placement of risks in the London market often leave much to chance, as the slip system means that there is commonly only outline agreement when a binding commitment is entered into and the precise terms are agreed – if at all – only at a later stage. Two quite different recent cases, both of which will be reported in Lloyd’s Rep IR, illustrate the risks involved. The first is Mabey and Johnson Ltd v Ecclesiastical Insurance Office plc, July 2000, in which the question was whether a term could be implied by reason of commercial necessity or market practice.