Context
Law firm Gowling WLG has published an article outlining the details of three recent Court of Appeal decisions which have confirmed that insurance policies are subject to normal “contractual interpretation”.
In the author’s view, It will “…take strong evidence to persuade a court that a clause should be interpreted differently to its natural and ordinary meaning.” The article may be of interest to those involved in policy wording drafting and the application of those wordings.
Key points to note and next actions
- In a trial of preliminary issues in the case of Project Angel Bidco Ltd (In Administration) v Axis Managing Agency Ltd & Ors [2024] EWCA Civ 446 . In a trial of preliminary issues, the Court of Appeal had to decide on whether losses arising from a breach of a warranty listed as “covered” in an appendix to a Warranty & Indemnity Insurance Policy, could still be specifically excluded from cover under provisions contained in the main body of the Policy itself. The court held that there was no obvious error in the drafting of the insurance policy – the Policy did not respond as the insured had believed it should and the losses were excluded.
- In the case of Bellini (N/E) Ltd v Brit UW Ltd [2024] EWCA Civ 435, the Court of Appeal found there was no obvious mistake in the Policy wording. The Policy required physical damage and in the absence of that damage the insured’s claim for business interruption cover failed. On its ordinary meaning, no cover was provided in the absence of physical loss, damage or destruction. It did not matter that the insured thought cover should be provided and that something had ‘gone wrong with the language’.
- In the case of Technip Saudi Arabia Ltd v The Mediterranean & Gulf Insurance and Reinsurance Co. [2024] EWCA Civ 481, (Technip SA) required the Court of Appeal to consider the meaning of a clause excluding damage to existing property owned by the ‘Principal Assured’. Two parties were listed as Principal Assureds’ and Technip (one of them) argued that the clause did not prevent a claim in respect of damage to property owned by the other. The Court of Appeal held that the natural and ordinary meaning of the clause meant it excluded claims for damage to property owned by any of the Principal Insureds named in the Policy.