Escape from Insurance Liability
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Insurance Company May Disclaim Liability if Vehicle is Not Efficiently Maintained in Every Respect I F a vehicle is run with smooth tyres, or some other defect, an insurance company may, in the case of an acci
dent, repudiate their liability. This point is brought home by the case of Brown v. Zurich General Accident and Liability Insurance Co., Ltd., which came before the High Court as a case stated by an arbitrator.
The insurance policy in respect of the vehicle contained the following condition, which is quite common: "The insured shall take all reasonable steps to safeguard from loss or damage and maintain in efficient condition the vehicle described in the schedule hereto and the company shall have at all times free access to examine the said vehicle."
Moreover, as is customary, there was a general provision that due observance and fulfilment of the conditions of the policy should be "a condition precedent" to any liability by the insurers:
Arbitrator's Findings In his findings of fact the arbitrator had stated that the van had been maintained in good mechanical repair by competent motor engineers; the bodywork was dilapidated but not dangerous; the windscreen was discoloured but not sufficiently to obscure the driver's view, and that whilst the rear tyres were both fully treaded, the front tyres were quite smooth where they touched the road surface, although there was no canvas showing through. He further found that the van had collided with a lorry owing to an uncontrollable skid on ice, which might have occurred even if the front tyres had had good treads.
After the accident the police had inspected the tyres, but no prosecution had resulted ander Regulation 71 of the Motor Vehicles (Construction and Use) Regulations. '
The insurers relied upon those findings as showing a breach of the condition set out above, and further contended that if a breach of that condition had occurred, liability must be excluded, as its observance was a " condition precedent." It was also argued for the insurers that the condition required an absolute duty to maintain the vehicle in efficient condition.
Mr. Justice Sellers said that the
clause was ambiguous in a sense and as such it must be construed against the insurers, who were seeking to rely upon it. In his judgment it could import no higher duty in maintenance than in safeguarding from loss or damage; that was a duty described as "to, take all reasonable steps."
He refused to accept the owner's argument that maintenance of the tyres was not included in maintenance of the vehicle, and he held that to run with smooth tyres was not "taking all reasonable steps" by the insured. Accordingly, he found for the insurance company.
Our legal adviser writes; The import
ance of this case is that it indicates clearly what the real issue in such an insurance claim is. The cause of the accident was, in fact, subordinate to the real issue, which was whether the insured person was in breach of a condition precedent to his being able to make the insurance company liable for whatever had befallen his vehicle.
It does not matter in such cases if the cause of the accident is unconnected with the breach of the condition. This is because of the " escape " provision which the insurers invariably insert, making observance of conditions itself a condition precedent to liability on the policy. Such is frequently not appreciated by the layman, who thinks, not unreasonably, that if the accident in respect of which he wants to claim was " not his fault," his insurers will pay. It cannot be too strongly stressed that it is essential to study and know the terms of one's insurance policies.