SARTEX QUILTS & TEXTILES LTD V ENDURANCE CORPORATE CAPITAL LTD

[2019] EWHC 1103 (Comm), Queen's Bench Division, Commercial Court, David Railton QC (sitting as a Deputy High Court Judge), 3 May 2019

Insurance (property) - Policy written on reinstatement basis - No reinstatement took place - Measure of indemnity - Whether policy contained a co-insurance clause

Sartex leased business premises in Rochdale. The premises, machinery and plant were insured at Lloyd's in the sums of £2,020,000 for buildings, and £2,500,000 for machinery and plant. The cover was stated to be on a "reinstatement" basis and the policy stated that it was to "indemnify the Insured against loss or destruction or damage to Property caused by or arising from" an insured peril. The policy also contained a special condition under which "No payment beyond the amount which would have been payable in the absence of this condition will be made ... until the cost of Reinstatement has actually been incurred". The policy also contained a cancellation clause permitting the insurers to give 30 days' notice to cancel the cover. There was a total loss by fire in May 2011. By the time of the trial there had been no attempt to reinstate any of the damaged property.