i-law

Lloyd's Maritime and Commercial Law Quarterly

MEASURING INDEMNITY IN PROPERTY INSURANCE

Michael Davie*

Endurance v Sartex
Three issues were considered by the Court of Appeal in Endurance Corporate Capital Ltd v Sartex Quilts & Textiles Ltd 1 concerning assessment of loss in a claim under a property insurance policy: (1) where reinstatement work has not been undertaken does the insured have to intend to reinstate the property to qualify for costs of reinstatement? (2) is the insured entitled to costs of reinstatement where the building is being rebuilt or repaired in a different way or place than before the casualty? (3) should there be a reduction in the entitlement of the insured to payment to make allowance for betterment?
The answers provided by the Court were: (1) not as a rule,2 though exceptionally the existence or otherwise of intent to reinstate may be relevant;3 (2) yes;4 (3) if betterment results from the insured’s choice, yes, and, if it is not the insured’s choice, still yes if there is a pecuniary benefit to the insured but no if there is only a non-pecuniary benefit.5
In the judgment of Leggatt LJ6 on the first of these issues, the approach taken in assessing loss in property insurance cases was merged with how loss is assessed in breach of ordinary (non-insurance) contract cases involving property damage and property defects,7 with the result that principles of mitigation of loss were apparently rendered relevant.


Case and comment

541

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.