Principles of USA Insurance Law similar to South Africa

Donald Dinnie, Norton Rose Fulbright

This US judgment’s summary of Michigan insurance law will be largely familiar to South African readers:

“An insurance policy is much the same as any other contract. It is an agreement between the parties in which a court will determine what the agreement was and effectuate the intent of the parties. Accordingly, the court must look at the contract as a whole and give meaning to all terms. Further, any clause in an insurance policy is valid as long as it is clear, unambiguous and not in contravention of public policy. This Court cannot create ambiguity where none exists.

Exclusionary clauses in insurance policies are strictly construed in favour of the insured. However, coverage under a policy is lost if any exclusion within the policy applies to an insured’s particular claims. Clear and specific exclusions must be given effect. It is impossible to hold an insurance company liable for a risk it did not assume.”

Although South African insurers’ experiences will be that it is not impossible to hold them liable for a risk they did not assume.

General insurance principles across civil and common law jurisdictions, subject to peculiarities of specific jurisdictional insurance legislation, are markedly similar.  Those insurance industries speak a common language.

River Park Place Condominium Association v Federal Insurance Company & Others

First published by: Financial Institutions Legal Snapshot