AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

insurance Watch for slips

14th May 1971, Page 61
14th May 1971
Page 61
Page 61, 14th May 1971 — insurance Watch for slips
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

by John C. Vann

• You rnay hate form-filling. But it cannot be avoided in insurance. For instance, a completed proposal form is invariably required before a policy can be issued.

An operator told me only last week that he has to face more and more paperwork each month. "But I side-step my insurance forms,'" he said, smiling, ''as my insurance broker does the necessary for me. I merely sign on the dotted line."

That sounds all right. Yet there's sometimes a slip 'twixt biro and form. In fact, a slip did occur when a certain proposal form was being completed in 1966. It all ended up in court earlier this year.

A car was being insured by its owner. He dealt through an insurance broker, who filled in a proposal form. One question asked where the car would normally be kept overnight. The broker ticked a box on the form indicating that it would be garaged, although apparently the owner had said that he parked the car in the street overnight. The broker explained to the owner that the premium would be higher if

the car was not normally kept in a garage during the night.

The owner glanced through the proposal and signed it, failing to spot the wrong answer about the garaging. In January 1969 the car, which had never been garaged, was damaged one night by a hit-and-run driver while it was parked outside the owners house.

The insurers repudiated liability for the damage saying that the proposal form contained a falseanswer. The point is that there is a warranty on a proposal form as to the truth of all the answers given. Thus if any answer is not true, the insurers are at liberty to turn down an ensuing claim.

The owner didn't like this repudiation, so he sued his broker alleging negligence, maintaining that the broker had been given the correct answer but was careless when completing the form.

In the Appeal Court it was established that it is the proposer's duty to check the answers on a proposal form and to make sure that they are correct. If the proposer fails in that duty he has only himself to blame. The duty of an insurance broker is to use such care as is reasonable.

You may consider that your broker is acting as agent for the insurers as well as being your agent, too. This may be so. But some insurers state on the proposal form that if you do not complete the form yourself, any person who does so on your behalf is treated as being your agent for such purposes. So the ball is thrust well and truly at your own feet.

Tags

Organisations: Appeal Court
People: John C. Vann

comments powered by Disqus