Insurance and Reasonable Precautions

Donald Dinnie, Norton Rose Fulbright

In Govender v Guardrisk, the insurer rejected liability under the policy on the basis that the insured had failed to “…take all reasonable precautions to prevent loss, damage, accidents…” as required by the relevant clause in the general terms and conditions of the policy. The defence failed because the insurer failed to prove that the insured drove recklessly.

The insured had been involved in a motor vehicle collision in which his motor vehicle was damaged beyond repair. Rejection was on the basis that the insured had been travelling at a speed that was so excessive that the insured was regarded as having been reckless.

The parties agreed that only a finding of recklessness would absolve the insured from liability under the policy.

The court made reference to the Santam Ltd v CC Designing CC for the test as to what is reasonable as between insured and insurer. The court must consider whether the insured recognised the dangers to which he was exposed and, if so, whether he deliberately courted them by taking measures that he knew were inadequate to avert them.

The court ultimately determined that there was no evidence before it to establish that the insured knew or foresaw that the road conditions could cause him to lose control of the vehicle.  On the particular facts of the case, the court said “the plaintiff did not act recklessly”.

The evidence was that the road surface was good and with a camber to the right, which would have caused water to flow across it from left to right, towards the stormwater drain. The plaintiff did not see sufficient water on the road’s surface to cause aquaplaning. He thought he had driven into a puddle. The evidence established there was no puddle. The probabilities overwhelming favoured water running across the road from left to right.

The insured’s evidence that he was travelling at 80km, could not be excluded. His evidence of aquaplaning, although less likely at 80km/hr, could not be excluded.

Insurers who seek to decline a claim for reason of breach of the reasonable precautions clause need to be satisfied that the evidence is sufficient to discharge what the courts see as a heavy onus on insurers to prove recklessness as the probable inference on the facts.

First published by: Financial Institutions Legal Snapshot