Waiver of breach of condition precedent

Kosmar Villa Holidays plc v Trustees of Syndicate 1243 [2007] EWHC 458 (Comm) is a highly significant decision. Gross J has rejected earlier authority for the proposition that a breach of a condition precedent in a policy automatically cannot be waived by the insurers unless they are estopped from denying coverage, and has held that a breach gives rise to an election on the part of the insurers. If the insurers elect to ignore the condition, then they must pay. The case highlights the significance of insurers reserving their rights once they are aware of a breach of condition but nevertheless continue to negotiate with the assured.