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Specialists in Shipping, Marine Insurance & Transit Law, London |
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Your are here: Home >> Bulletins Yacht Insurance Warranties RevisitedThe decision of Magistrate Judge Pohorelsky in Joseph N Cunningham -v- Insurance Company of America, referred to in our September 2006 bulletin, has been the subject of an appeal. Having considered the report and recommendation of the Magistrate Judge, District Judge Dearie upheld the decision that summary judgment be granted in favour of insurers, albeit on somewhat different grounds to those stated in the first instance judgment. The Magistrate Judge had concluded that, as the assured had repeatedly violated a lay-up warranty before the date of the fire which destroyed his vessel, he was not entitled to coverage under the policy. However, the Magistrate Judge had left open the question as to whether the assured was in actual breach of the lay-up warranty at the time of the fire. District Judge Dearie found that this was clearly the case - and that the actual breach of warranty at the time of the fire entitled insurers to avoid liability under the policy. The assured sought to argue that, even if he was in actual breach of the warranty, the breach was not material to the loss of the boat. However, District Judge Dearie decided that under New York law (which is in all material respects the same as English law on this issue) there was no cover under the policy even if there was no material or causative link between the breach of warranty and the loss in fact suffered. As an alternative to his claim against his insurers, the assured had also brought a claim against his brokers for their failure to procure an adequate policy. The Magistrate Judge had concluded that this was time-barred, on the basis that the time limit for bringing such an action commenced on the date on which the contract of insurance was procured. However, the District Judge held that the appropriate date for the accrual of any claim against the brokers in tort/negligence was the date of the loss or the date of denial of the insurance coverage. As a result, the brokers' application for summary dismissal of the claim was denied. If you require a copy of the judgment please do not hesitate to let us know. As mentioned in our September 2006 Bulletin, the Law Commission in England is currently reviewing insurance contract law. It has recently published issue papers dealing with misrepresentation/non-disclosure and warranties. These papers will be the subject of a further bulletin in the near future. Should you have any queries please do not hesitate to contact Mark Lloyd or Christopher Dunn of this office. February 2007 Return to Bulletins |
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Added: 06 September 2010
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