Bluebon Ltd v Ageas (UK) Ltd & Ors

Bluebon Ltd v Ageas (UK) Ltd & Ors

The Electrical Installation Inspection Warranty, properly construed, required inspection and testing every five years from the last inspection, and if not done within five years prior to inception, inspection was required immediately with no cover until compliance. The warranty is a suspensive condition suspending all cover (or at least all cover for losses arising out of fire) from the date of breach. There is no requirement for a causal link between breach and loss. Insurers are under no liability to indemnify the Insured for the fire loss as the warranty was not complied with.

Parties
Claimant: Bluebon Limited (In Liquidation); First Defendant: Ageas (UK) Limited (formerly Fortis Insurance Limited); Second Defendant: Aviva Insurance Limited; Third Defendant: Towergate Underwriting Group Limited
Jurisdiction
England and Wales
Judgment Date
15 December 2017
Procedural Posture
Commercial Insurance Dispute (preliminary Issue) / Judgment on Preliminary Issue
Outcome
Claim dismissed (preliminary issue determined in favour of Insurers)
Legal Topics
Interpretation of Insurance Warranties, Suspensive Conditions, Condition Precedent, Repudiatory Breach, Construction of Insurance Policies
Insurance Law Contract Law Interpretation of Insurance Warranties Suspensive Conditions Condition Precedent Repudiatory Breach Construction of Insurance Policies

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Parties

Bluebon Limited (In Liquidation)

Claimant

Ageas (UK) Limited (formerly Fortis Insurance Limited)

First Defendant

Aviva Insurance Limited

Second Defendant

Towergate Underwriting Group Limited

Third Defendant

Procedural Posture

Commercial Insurance Dispute (preliminary Issue) / Judgment on Preliminary Issue

Legal Issues

  1. 1 Proper construction of the Electrical Installation Inspection Warranty in the insurance policy
  2. 2 Whether the warranty is a true warranty, suspensive warranty, or risk-specific condition precedent
  3. 3 Whether breach of the warranty suspends or voids cover

Ratio Decidendi

The Electrical Installation Inspection Warranty, properly construed, required inspection and testing every five years from the last inspection, and if not done within five years prior to inception, inspection was required immediately with no cover until compliance. The warranty is a suspensive condition suspending all cover (or at least all cover for losses arising out of fire) from the date of breach. There is no requirement for a causal link between breach and loss. Insurers are under no liability to indemnify the Insured for the fire loss as the warranty was not complied with.

Court Disposition

Claim dismissed (preliminary issue determined in favour of Insurers)

Orders

  • Declaration that the Electrical Inspection Warranty is a suspensive condition suspending all cover (or all cover for fire) from breach
  • Insurers under no liability to indemnify the Insured for the fire loss