A recent decision of the SCA – which will have an important impact on SA’s insurers – centered on the rejection of an insurance claim on the basis that a person who was not the policyholder, provided false, incorrect or dishonest information to the insurer. A Business Tech report says the case involved a dispute between King Price Insurance and Concise Consulting Services.
In 2013, a company vehicle that was insured by King Price was damaged when being driven by one of its employees (the regular driver). A director had reported the claim, but he had included false information supplied by the driver about his movements and level of intoxication. As a result, King Price rejected the claim. However, the court found that for an insurer to rely on the clause ‘anyone who acts on your behalf’, they would have to prove that this person was an agent of the insured, within the legal meaning of agency. The SCA regarded the clause as ambiguous and that the benefit of the ambiguity should go to the insured. The court found that the claim should be paid because the insured itself (the director) was not dishonest and considered the regular driver to be a third-party and witness only.
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