Category Legal Affairs

Gross negligence vs. negligence

14 February 2024 Myra Knoesen

The legal distinction between "negligent conduct" and "grossly negligent conduct" in insurance claims, was recently shared in an article by Adams & Adams, with a focus on a recent case involving a stolen vehicle.

It highlights the insurer's rejection of the claim based on the gross negligence clause and the subsequent dispute over the insured's conduct. The Office of the Ombudsman for the Short-term Insurance (OSTI) found the insured's actions to be negligent but not grossly negligent. This case underscores the ongoing challenge of defining negligence in insurance claims and suggests a need for insurers to review and clarify their policy wordings. 

We thought we would share the article with you, our readers, as you may find it interesting.

Negligence versus gross negligence dilemma

According to the article, 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”, an insurer is entitled to avoid a claim. Given the fine and often blurry line between these two forms of negligent conduct, it is unsurprising that there have been a lot of legal disputes revolving around this issue, particularly in insurance cases. 

Some of these disputes have been resolved through rigorous court litigation, whilst others have been resolved by the OSTI. Grossly negligent clauses feature prominently in short-term insurance policies. It is, consequently, not uncommon for insurers to reject insurance claims on the basis of gross negligence. In the latest Ombudsman’s Briefcase, there is a finding relating to a car insurance claim which many readers and insurance enthusiasts may find interesting and even harsh on the insurer. 

Synopsis of the Ombud’s finding

The insured vehicle was stolen at a security-controlled complex where the insured resided. The insured discovered the theft of the vehicle in the morning, at around 6h00. She was in disbelief that her vehicle was stolen. Therefore, she did not immediately inform the tracking company. She contacted her brother-in-law and, together with the chairperson of the body corporate, searched around the complex. She then attended to other chores. Thereafter, she went to report the incident at the police station. It is at the police station where she was asked whether she had reported the incident to the tracking company – which she answered in the negative. 

From the police station, she went to work, and this is where she contacted the tracking company. This was around 10h35. Upon submission of the insurance claim, the insurer rejected the claim. The rejection was predicated upon the gross negligence clause. The insurer submitted that the conduct of the insured, i.e., failure to report the theft incident as soon as she discovered it, was grossly negligent and, as such, deprived the insurer an opportunity to recover the vehicle (or, otherwise, minimised the possibility of recovery). The OSTI found that the insured’s conduct, at best, was negligent, but certainly not grossly negligent. The OSTI stated that there was no certainty as to the time at which the vehicle was stolen, and therefore, there was no guarantee that acting swiftly at around 6h00, would have ensured the recovery of the vehicle. 

Brief discussion

In favour of the insurer, there is a sound argument to be made that the clause linked to the gross negligence clause is unambiguous and should be adhered to, failing which the insurer should be able to escape liability. Clause 4.5 of the policy in the case under discussion stipulates, “[the insured] need to take all reasonable precautions to prevent or minimise loss or damage…” It may be argued that notwithstanding her state of shock and disbelief, the insured should have contacted the tracking company when, at the latest, realising that the vehicle is not within the complex. It would be reasonable to expect that, upon discovery of the theft of a vehicle, a person would call his or her tracking company. This is the main reason why insurers insist on the installation of a tracking device. If people wait for hours upon discovery of a theft of the vehicle before informing their tracking company, it would be pointless for insurers to require that the tracking device be installed. The fact that there was no certainty with regard to the time of theft is no justification for the delay in notifying the tracking company. In any event, there is never any guarantee that there will be recovery of a stolen vehicle if an insured reports the theft sooner, as, in some cases, vehicles are totally stripped in minutes; however, the responsibility to notify the tracking company soon remains. The writer is of the view that, whilst the actions of the insured could have been quicker, there may be room to argue that in the absence of certainty regarding the time of theft, she had to be given the benefit of the doubt in that the incident may have happened many hours ago and the chances of recovery were almost non-existent. This argument would accord with the principles of fairness and justice. 


This case illustrates the unceasing dilemma in matters concerning “negligence” and “gross negligence” in insurance claims. This will continue to be the case, as each case presents its own peculiar facts and circumstances. Given the principles of equity, it may be necessary for insurers to revisit and reconsider their policy wordings. Most gross negligence clauses, as they stand, are open to interpretation and that exposes them (insurers) to liability. Whilst it is impossible to cater for all sorts of incidents that may occur and how they may occur, it may be beneficial to expand on the clause so as to provide “examples” of what may constitute gross negligence. 

Writer’s thoughts

Cases like these serve as valuable learning opportunities for insurers and intermediaries alike. They underscore the importance of clarity and precision in policy wordings, particularly regarding clauses pertaining to negligence and gross negligence. Ultimately, by learning from cases such as these and refining their practices accordingly, insurers, and intermediaries can better serve their clients and mitigate potential disputes in the future. Please comment below, interact with us on Twitter at @fanews_online or email me -


Added by Kagiso Shabangu, 22 Feb 2024
Great piece .and insight . An eye opener as well .
These cases emphasize the critical role of effective communication between insurers, intermediaries, and policyholders. Clear and open communication regarding policy terms and conditions can help prevent misunderstandings and disputes down the line. It is essential for all parties involved to maintain transparent dialogue throughout the insurance process to promote mutual understanding and cooperation.
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Added by Douglas Mzwakhe Vidima, 15 Feb 2024
My opinion, OSTI was fair in that the insured was not grossly negligent but negligent in reporting to the tracker company timeously and immediately upon discovery of the stolen/missing vehicle. The question is, did the tracker company recover their tracking unit while the vehicle went/was missing? and did the insurer ever thought of treating customer fairly as the customer was paying premiums for the loss to be rejected on the basis of gross negligence clause. The fact remains that the loss was reported to the tracking company and the Police the same day the vehicle went missing/stolen. Well done to OSTI for ruling in favour of the insured just for negligence and not gross negligence.
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Added by Ingrid Denzin, 14 Feb 2024
This incident does not mention whether the car was kept in a lock up garage. If it was parked out in the open, even inside a "secure" complex, that would be negligence in itself.
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Added by Cynical Simon, 14 Feb 2024
I am of the opinion that in the case under reference the Osti was 100% correct, and the insurer was looking how to escape it's obligation to pay.
The insured was never wanton, willful or reckless and at no stage was the life or property of another at risk.
It is my humble opinion that what is at stake here is not the question whether the insured was negligent or gross negligent but instead whether a clear and unambiguous policy condition was breeched or not..

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