Construction of insurance policies - Determining primary use

(Caple v Sewell, [2001] EWCA 1848, December 2001)

Insurance policies covering property damage often contain use restrictions, whereby the assured is covered only if an insured peril has occurred while the subject matter is being used for one or more of the purposes specified in the policy. This type of clause gives rise to difficulty where the assured’s intentions are mixed. The most recent example of the approach of the courts to the construction of a use restriction is the decision of the Court of Appeal in Caple v Sewell [2001] EWCA 1848, to be reported in [2002] Lloyd’s Re IR. The Court of Appeal applied the familiar test of looking for the assured’s primary purpose.