Insurance Law

Claims-made policies in professional indemnity insurance often include prior exclusion clauses, which serve to limit the insurer’s liability for claims arising from circumstances that occurred or were known before the policy’s inception date. Insurers should exercise care in drafting prior exclusion clauses to ensure clarity and precision. Ambiguities in these clauses can lead to disputes […]

Can a professional services firm rely on a client’s assurance that they will not pursue legal action to avoid notifying its claims-made professional liability insurer of a potential claim arising from an alleged omission? This question is particularly significant in the context of claims-made professional liability insurance, where the insured’s duty to disclose any potential […]

Introduction On 29 November 2024, the Johannesburg High Court delivered judgment in a delictual case where the Plaintiff, a lessee on the Defendant’s premises, sued the Defendant after a gate fell on her. The significance of this judgment is highlighted below. Brief Facts The Plaintiff sustained injuries in August 2020 when a malfunctioning gate fell […]

Introduction The Western Cape High Court recently delivered judgment in yet another cybercrime incident. These cases have been growing rapidly, signalling a surge in cybercriminal activities. One might have expected a decline in such incidents, given the legal precedents addressing them, but this has not been the case. Facts The parties involved in the case […]

Like in many countries, during the festive season in South Africa, most activities come to a near standstill, including the operations of the courts. The Rules of Court recognise dies non (days on which the courts do not sit). Although the exact dates may vary each year, dies non typically extends from the 16th of […]

Introduction Recently, the Johannesburg High Court dismissed a personal injury case against an institution, finding no evidence of negligence or wrongdoing on its part. In recent years, South Africa has witnessed a growing trend of litigation, with an increasing number of lawsuits being filed—even in cases where the objective facts do not justify legal action. […]

Introduction: Once a party has been effectively served with summons, they must act promptly and follow the procedures set out in the Uniform Rules of Court (“the Rules of Court”). Failure to do so can lead to undesirable and costly consequences. The judgment delivered on 13 November 2024 by the North-West High Court serves as […]

In a matter of weeks, the festive season will be in full swing. This period usually comes with numerous lifestyle adjustments, including traveling, acquiring new items, and upgrading or improving homes, vehicles, and other belongings. These changes often affect the value of such items, making them more attractive targets for theft and exposes them more […]

On 16 October 2024, the Pretoria High Court delivered a judgment in an insurance case where the insurer had repudiated the policyholder’s claim on three grounds: The policyholder drove at an excessive speed, showing reckless behaviour; The policyholder allegedly misrepresented facts in his claim by stating he was avoiding a dog when he lost control […]

Disputes often arise between insurers and policyholders regarding the value of insured property. Some of these disputes are resolved with little difficulty, as the value can be relatively easily established. For example, in cases where a storm causes partial damage to a home and its contents, the insured property remains assessable. However, other disputes are […]

Directors and Officers (D&O) insurance policies often exclude claims arising from actual or alleged contractual liability. These exclusions typically prevent coverage when the company or an insured person is sued for breaching a contract or failing to fulfil contractual obligations. This is because D&O policies are designed to cover wrongful acts related to executive actions […]

The snowfall last week, which impacted much of KwaZulu-Natal and parts of the Free State, serves as yet another reminder of South Africa’s increasingly unpredictable weather patterns. In 2023, Johannesburg also experienced a light snowfall, though it was far less severe than last week’s event. Even then, such occurrences were considered unusual in the South […]

Introduction: South Africans are among the most highly indebted people in the world. With the unemployment rate showing no signs of improvement, there is no end in sight for this crisis. Persistent socio-economic issues are also exacerbating the situation. The widespread indebtedness of the majority has been recognized by the government for some time, leading […]

Introduction: When employees are dismissed or abscond following suspected theft or misappropriation of funds, ex-employers often attempt to recover the lost funds from the ex-employee’s pension benefits. In such cases, time is of the essence, as ex-employees may try to withdraw their pension benefits quickly. To have a chance of recovering the lost monies, an […]

The High Court of South Africa, Gauteng Division, Pretoria, was recently called upon to decide on a claim based on interim payment certificates from a building contract between the applicant, a construction company, and the respondent, a shopping centre. Under the building contract, the applicant was contracted to build a shopping centre in Montana, Pretoria. […]

When a liability insurance policyholder is being sued, they refer that legal case to their insurer. If a claim in question falls within the four corners of a policy, the insurer handles the claim on behalf of the policyholder. If the matter goes to court, the court papers cite the policyholder (not the insurer) as […]

Dishonest conduct by representatives of financial service providers (“FSPs”) continues to plague the sector. This is evident from an analysis of the most recent rulings of the Financial Services Tribunal, where a substantial proportion of the rulings pertain to reconsideration applications, challenging FSPs’ decisions to debar their former representatives. Are these simply the actions of […]

In today’s fast-paced digital world, legislation often struggles to keep up with the rapid advancements in technology. An example of such legislation is the Justices of the Peace and Commissioners of Oaths Act, 16 of 1963 (“the Act”). The Act requires that oaths be administered in the presence of a commissioner of oaths. Is this […]

A judgment from the High Court of South Africa, Eastern Cape Division, Mthatha, serves as a timely reminder that a lien (right of retention) can be defeated by providing adequate security for the debt alleged to be due. On 7 March 2023, the insured was involved in a collision on the road between Port St […]

Introduction The Johannesburg High Court (“the court”) has handed down a judgment on a matter that brought, once again, the prescription intricacies to the fore. There are many cases pertaining to prescription, from different courts, and, with each case, there are unique variables that make each case intricate. Facts Briefly, the Plaintiff sued his erstwhile […]

President Ramaphosa has promulgated the National Health Insurance (“NHI”) Act (“the Act”). The NHI, in its bill form, has been controversial since its introduction and has attracted significant critique from various stakeholders. It is therefore likely that the Act will be the subject of fierce litigation, sooner or later. Some of the institutions/groups which have […]

A judgment from the High Court of South Africa, Eastern Cape Division, Bisho, serves as a timely reminder for legal practitioners to diligently consult the rules of court before instituting proceedings to avoid the pitfalls that may arise from failing to follow a rule correctly. The applicant sued the first and second respondents, seeking damages […]

Restraint of trade agreements safeguard businesses by legally preventing employees from joining competitors, thus protecting businesses’ proprietary information and maintaining their competitive advantage. In an urgent application seeking to enforce a restraint of trade agreement, recently before the Labour Court of South Africa, Johannesburg, an insurance brokerage firm made the fatal error of failing to […]

A judgment stemming from the High Court of South Africa, Limpopo Division, Polokwane serves as a timely reminder that a “without prejudice” offer, if not drafted or approached properly, can interrupt the prescription of a claim. Facts of the case The plaintiff instituted action against the defendant for the injuries she suffered from a helicopter […]

Attorneys representing plaintiffs should take note of a judgement recently handed down in the High Court of South Africa, Gauteng Division, Johannesburg. Two unemployed plaintiffs instituted action against the Minister of Police, Minister of Justice and Correctional Services, and the National Director of Public Prosecutions, each claiming R5,000,000.00 for their alleged unlawful arrest and malicious […]

Policyholders and insurers alike should take note of a judgement recently handed down in the High Court of South Africa, Gauteng Division, Johannesburg. The case concerned a claim for specific performance in terms of a life insurance policy. The policyholder lodged a claim with his insurer through its authorised agent on or about 27 September […]

An appeal serving before a full bench in the High Court of South Africa, Gauteng Division, Pretoria has recently shed light on whether a midstream review of proceedings conducted at an investigative stage is permissible. The appeal stemmed from a ruling by a single judge in the same division that an investigation conducted at the […]

INTRODUCTION: The law draws a distinction between “negligent conduct” and “grossly negligent conduct”. Grossly negligent conduct is synonymous with reckless conduct. The distinction is of great legal significance. If a conduct is deemed to be “negligent”, an insurance policy is bound to respond to a claim. If, however, it is found to be “grossly negligent”, […]

It is that period where there are many pressing things which preoccupy people’s minds, such as school/university fees, finalising the last errands before heading back to work, etc. Against this backdrop, it is perhaps understandable why this is a period where most insureds are likely to miss sight of critical aspects of their insurance policies. […]

Large parts of Johannesburg and Mpumalanga were hit by a severe hailstorm on Monday, 13 November 2023. Since then, various media platforms have been abuzz with videos and pictures depicting the damage caused by the said hailstorm. Many cars, roads, buildings, infrastructure, establishments, etc. were damaged in the process. Naturally, the first thing that the […]

Insurance claims can be repudiated for many varying reasons – from the most obvious to the least expected reasons. One of the best ways of trying to avoid an insurance repudiation is to understand your contractual duties stemming from your policy. Although this does not guarantee a payout, it does, nonetheless, enhance one’s chances of […]

The news that dominated the headlines this past weekend, 15 – 17 September 2023, was the storm surge incidents that swept across three coastal provinces – the Western Cape, Eastern Cape, and KwaZulu-Natal. Mainstream media and social media alike were abuzz with the news. Since then, videos depicting the storm surges have been circulating across […]

During the course of last year, 2022, there were various media reports that there has been a significant rise in home insurance claims. Complimenting these reports was the announcement by the Short-term Ombudsman’s Office that there had been a rise in disputes relating to home insurance claims. There were many reasons attributed to this rise, […]

On 5 September 2023, a noteworthy legal judgement emerged from the Gauteng Division of the High Court of South Africa, situated in Johannesburg. The case centered around an individual sanctioned by the Johannesburg Stock Exchange (“JSE”) for transgressing various provisions of the JSE’s Listing Requirements. Aggrieved by the sanction imposed, the individual applied, under section […]

Introduction: It is not uncommon for financial services representatives (“the representatives”) who are debarred to run out of time to file their reconsideration applications. There have been, over the years, various reasons submitted to the Financial Services Tribunal (‘the Tribunal”) trying to condone the late filing of such applications. Some of the reasons are meritorious […]

Road accidents involving food delivery drivers are far more common than you can imagine, with most cases reported to have resulted in serious injuries and death. Following the COVID-19 pandemic, with most people choosing to stay indoors, the food delivery industry expanded and presented more opportunities for players in the industry. It also created job […]

Introduction: It is often said that South Africa’s financial sector is one of the most highly regulated in the world. This is certainly true if one has regard to the several ‘financial sector laws’ (see Schedule 1 of the Financial Sector Regulation Act) that regulate the financial sector. There are several statutory duties imposed on […]

There have been reports regarding the rise of non-indemnity claims stemming from unnatural deaths. This is certainly worrying for life insurers. This is particularly concerning because life insurers have had to entertain several claims in the past couple of years due to Covid-19 related deaths, and subsequently, the July 2021 unrest and the 2022 Durban […]

The past few weeks have been engulfed with flames of truck arson attacks in South Africa. Over 20 trucks have been torched in various provinces including Mpumalanga, Limpopo, Kwa-Zulu Natal, etc. While the sudden rise in these incidents is undoubtedly worrisome, one must bear in mind that truck attacks are not a novel phenomenon in […]

INTRODUCTION The North Gauteng High Court recently handed down a judgment which will undoubtedly gain support from many policyholders. Whilst the matter specifically relates to a car insurance claim, the principles laid down in this case will certainly find application in other insurance cases. The case is significant for both the insurers and the insureds […]

Introduction It is almost impossible to think of an insurance policy that does not have any conditions and/or warranties. Most insurance policies, if not all, have various conditions and warranties which, if they are not adhered to, may lead to a lawful rejection of one’s claim. The conditions and warranties perform extremely important functions in […]

The global business community is undergoing a transition towards a green economy driven by a shared recognition of the urgent need to address climate change, protect natural resources, and promote sustainable development. As businesses in South Africa and elsewhere adopt sustainable practices and environmentally conscious strategies, they can expect to encounter two categories of risks […]

For the past few days, the international news has been dominated by the missing Titanic submarine. Social media platforms have also been abuzz with the missing submarine. One of the interesting questions that seemed to be prominent was the question of whether insurance claims could be submitted if the passengers of the submarine were not […]

Insurance contracts are sometimes referred to as reciprocal contracts because they usually involve both the insured (paying a premium and getting peace of mind) and the insurer (bearing the risk whilst getting premiums) – both parties bear some obligations and (potential) benefits. There are, however, instances where the lines may be blurred. This is due […]

A few years ago, several well-known short-term insurance companies took legal action against an intermediary company due to the damages they incurred as a result of the intermediary’s collapse. The intermediary, presently in liquidation, was responsible for the collecting and accounting of premiums owed to the insurers. Surprisingly or some might even contend strangely, the […]

Insurance policies often contain a standard clause requiring policyholders to comply with the laws of the country where the policy is issued. The intention behind the clause is to ensure that policyholders act in a lawful manner. Failure to comply may lead to policy exclusions or the denial of claims. With the current energy crisis […]

The parties to an insurance contract all have a legal duty to disclose. All the material information must be disclosed. This sounds simple enough, however, this is not so in real life. This is evidenced by the fact that there is plethora of court cases that relate to the issue of non-disclosure. The substance of […]

It is not unusual to have insurance claims approved but payouts being underwhelmingly low and/or slow. This was mostly seen during COVID-19 in relation to business interruption claims. Whilst most claims were approved by the insurers, the payouts left the insureds with great dissatisfaction. Despite COVID-19, many other major events led to this kind of […]

Many policyholders are underinsured, whether it be deliberately or ignorantly so. Either way, it may just come back to bite them at the claims stage. Principle of average Underinsurance arises when the amount for which an object is insured is less than the actual value thereof. When this happens, it gives rise to the principle […]

The National Shutdown of 20 March 2023 saw many businesses and institutions close down in fear of violence and destruction to their properties. To the contrary (credit being due to the protestors and overwhelming visibility of law enforcement) this was not the case. Whilst the anticipated damage was less than expected, it is nonetheless apt […]

Litigation in South Africa has risen tremendously over the years with more and more individuals and organizations seeking redress through our courts. The increase in litigation can largely be ascribed to: Improved access to justice through initiatives, such as the Small Claims Court, Legal Aid South Africa, and the various industry Ombuds. Consumer friendly legislation, […]

Most short-term insurance policies have a standard “precautionary clause” that requires the insureds to “take all reasonable precautions to prevent loss, damage, accidents…”. This clause ordinarily forms part of the general terms and conditions of the policy. It is not uncommon for insurers to rely on this clause to reject claims – sometimes rightly so, […]

Non-disclosures by policyholders are rife within the long-term insurance industry. A non-disclosure can be committed fraudulently, innocently, or negligently. In any respect, the non-disclosure needs to have been material and must have induced an insurer into entering a contract of insurance to warrant the contract being avoided (cancelled). The test for materiality is an objective […]

It is not unusual for many insureds to complain about unexplained delays in their insurance claims. More often than not, insureds undergo a very frustrating period whilst waiting for the outcome of their insurance claims. There are many applaudable reasons why insureds may become frustrated when there are delays in the claiming process – an […]

Insurance policies often contain clauses requiring policyholders to take reasonable steps to maintain an insured object. The reason therefore is quite simple – the purpose of insurance is to protect policyholders against unforeseen events, not to compensate them for wear, and tear. A policyholder’s failure to maintain an insured object may result in any claim […]

Introduction: South Africa has been experiencing a heavy downfall for a couple of weeks now, which has resulted in heavy flooding in most provinces. It is for this reason that the President of the country has declared a National State of Disaster. The ongoing flooding has caused serious damage to people’s properties, cars, house contents, […]

The Ombudsman for Short Term insurance has ruled that an adventure resort’s insurer is liable to indemnify it against a claim brought by one of its patrons. On 19 January 2019, a patron sustained severe burns when hot oil from one of the resort’s quad bikes spilled onto the patron’s legs. The patron immediately demanded […]

South Africa is suffering from the worst loadshedding ever implemented. This is causing significant headaches for the insurance industry, particularly the short-term insurance companies. The energy crisis comes on the back of the major calamities of recent years, such as Covid-19, the July 2021 unrest, and the Durban floods of April 2022. As a result, […]

During May 2015, a fire broke out on farm owned by Normandien Farms (Pty) Ltd (“Normandien”), causing extensive damage to a plantation which was insured by Safire Crop Protection Co-operative Limited (“Safire”). Normandien subsequently lodged a claim with Safire who in turn rejected the claim. The reason for their rejection was twofold; firstly, Safire believed […]

Within the first month of the new year, there have been 2 (TWO) tigers reported to have escaped from captivity and found to be roaming around freely on the streets. The first one was found and euthanised. By the time it was located, it had already seriously injured at least one resident. There have been […]

Our client, a successful medical practitioner, suffered a cardiac arrest (“the event”) following a routine procedure to remove a mass from his kidney. Pursuant to the event, our client was placed on a ventilator for months, resulting in him not being able to speak post being weaned off the ventilator. In addition, our client suffered […]

Many insured consumers may be in for a nasty surprise for wrongly believing that they enjoy blanket cover from their insurer. The reality is however that their cover is limited to that specifically agreed with their insurer. The cover usually relates only to physical damage sustained to an insured object, meaning that, unless otherwise agreed, […]

For most households, the first few months of the year are the most financially demanding and, as a result, people struggle to make ends meet. It is, as such, not surprising that most people relook at their budgets to identify non-essential expenses. It often happens that insurance policies are one of the few items that […]

A large insurance company’s application to rescind a court order, granted by default, was dismissed with costs in the High Court of South Africa, Gauteng Division, Pretoria. The insurer, in exchange for monthly premiums to be paid by the insured, agreed to indemnify the insured for loss or damage. The insured’s motor vehicle was subsequently […]

A few media houses have recently reported that Mr. Erlo Goshai, a Cape Town motorist, has warned motorists to “read the fine print when entering into contracts with their insurance company to make sure they are adequately covered”. According to the reports, Goshai was driving along Marine Drive and was in the process of turning […]

Consumers procure insurance for many reasons. One of the reasons is to protect themselves from their own actions. Negligence v recklessness Some actions enjoy cover under insurance policies whilst others don’t. For example, negligent actions are usually covered whilst reckless actions are usually not. Negligence can colloquially be defined as failing to act reasonably which […]

The festive season is upon us, and everyone is eagerly looking forward to their much-needed break. It is the “crazy season,” with lots of buying, travelling, partaking in various adventurous activities, etc. An unfortunate reality is that during the festive season, there are lots of insurance related perils that tend to occur – which do […]

The Supreme Court of Appeal (“the SCA” hereinafter) recently delivered a judgement in a matter involving Zurich Insurance Company South Africa LTD (“the insurer”) and the Gauteng Provincial Government (“the insured”), bringing to an end litigation that commenced early 2015. This insurance repudiation matter involving highly technical legal and civil engineering components is crucial for […]

Thousands of consumers make use of the services of a broker, to procure insurance from an insurance company. In such instances, two separate agreements come into existence.[1]The first is between the consumer and the broker and the second is between the consumer and the insurance company (represented by the broker). While both agreements involve the […]

South Africa’s energy crisis seems to be getting worse by the day, and there is no end in sight. Eskom, the only public energy supplier who has in the past received massive financial injections from the government, seems to be helpless at this point. There are many reasons that have been advanced for this crisis […]

Introduction: The major events of recent years, particularly in South Africa, including the 2021 July civil unrest and 2022 Durban floods, have brought forth an issue that is not often entertained due to the rarity of such events, and that is whether it is possible to claim under a life policy where the deceased’s body […]

PRICE TO PAY IN THE KING PRICE CASE: FAILURE TO COMPLY WITH YOUR INSURER’S REQUESTS!! INTRODUCTION On 9 May 2022, the South Gauteng High Court division delivered a judgment in the matter between Zandisiwe Musa (“Musa” hereinafter) and King Price Insurance Company (“King Price” hereinafter). This judgment is significant in many respects, as it highlights […]

As if there have not been enough fires in the country for 2022, there is an expected rise in wildfires as the winter season is in full swing. With strong and harsh winds that naturally come in the month of July, wildfires are to be expected and businesses and individuals alike will need to be […]

Insurance provides cover for losses arising from insured events which may happen in the future. Against an agreed premium, the risk of an insured event arising is transferred from the insured to the insurer. Insurance is, therefore, a critical risk mitigation component to both businesses and individuals alike. In practice, insured events triggering insurers policies […]

Weather conditions of any sort have direct effect on the insurance industry. The severity thereof is, however, of particular significance for the industry, as the possibility of insured risk materialising heightens. At this point in time, this is particularly relevant in South Africa given the ongoing heavy and persistent rains. There have been reports, images […]

Insurance provides cover for losses arising from insured events which may happen in the future. Against an agreed premium, the risk of an insured event arising is transferred from the insured to the insurer. In practice, insured events triggering insurance policies to respond are not always clear-cut. This is largely due to the complex wording […]

The past few years have tested the resilience and strength of insurers to the greatest magnitude. This has been the case worldwide and, more so, here in South Africa. Many insurance-triggering events occurred, requiring insurers to respond. Although most of these occurrences were relevant mainly to short-term insurers, some were relevant to long-term insurers. After […]

Introduction When concluding an insurance contract, it is important in the pre-contractual stage, to disclose all material facts which would be relevant to the assessment of the risk, the premium to be determined and decision to be made by the parties to conclude the agreement. A statement of fact which is false or misleading, amounts […]

It is fast becoming a normality to wake up to the reports of fire break outs in South Africa. Since the July 2021 civil unrest, there has been further major fire break outs. This year alone, 2022, there has been at least 4 (FOUR) major fire break outs reported. During the July 2021 civil unrest, […]

The ongoing persistence of loadshedding is causing havoc for households and businesses alike. As if Covid-19 and civil unrest and looting experienced mid-year were not devastating enough for businesses, they now have to put up with the current ongoing loadshedding. Whilst most big businesses may have insurance cover and mitigating equipment in place to deal […]

INTRODUCTION Businesses always strive to have sufficient insurance cover for all and any possible perils. For this, they are willing to spend a lot of money. It is for this reason that when an insured peril occurs, they realistically and reasonably expect their insurers to pay out and/or repair the damage. Unfortunately, this is not […]

The events of the past two years, from the COVID-19 pandemic to the recent riots, have underlined the critical importance of business insurance. Unfortunately, there are no guarantees that your business insurance claim will be settled and not repudiated. Although an insurer has the right to protect its interests when handling your insurance claim, your […]