Insurance And Reinsurance Update - 5th June 2012

Ted Baker Plc v Axa Insurance UK

Whether theft by employee fell within scope of an insurance policy/construction of insurance policies

http://www.bailii.org/ew/cases/EWHC/Comm/2012/1406.html

The insured discovered that one of its employees had been stealing stock from its warehouse and sought an indemnity from its insurers. The relevant insurance policy had a number of discrete sections including a Theft section which contained an endorsement providing that "the insurance by this Section extends to cover loss...resulting from theft or any attempt thereat but the Insured shall be responsible for the first £1,000...which does not involve entry to or exit from the Premises by forcible and violent means".

One of the sections of the insurer's standard wording - the Theft by Employees Section ("TES") - was not selected by the insured and did not form part of the policy issued to the insured. Nevertheless, Eder J held that there was cover under the Theft section of the Policy "and the wording should be given its plain meaning, namely that theft means theft, including theft by employees as this is not otherwise excluded".

The judge further held that there was no customary usage of the expression "theft or any attempt thereat" and underwriters' subjective views as to how cover should work were inadmissible. He also rejected an argument that something had gone wrong with the wording because the insured's construction was contrary to business commonsense or that market practice assisted the insurers' arguments. He held thatRainy Sky v Kookmin (see Weekly Update 39/11) did not apply to this case because there were not two competing constructions of the words used.

The judge acknowledged that inMopani Copper Mines v Millennium Underwriting (see Weekly Update 25/08) Clarke J had held that it was possible to look at deleted words in a policy in certain circumstances. However, he concluded that in this case the policy was clear and so it was not permissible to take into account the insured's non-selection of the TES as an aid to construction of the Theft section of the policy. In any event, the TES could not have been selected without amendment in this case and so, even if the non-selection was taken into account, it would not have helped insurers.

Elafonissos Fishing v Aigaion

Whether insured had proved its claim/breach of warranty allegation

http://www.bailii.org/ew/cases/EWHC/Comm/2012/1512.html

Clyde & Co for defendant

The insured sought to claim for...

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