Green Island Organics Ltd v QBE Insurance (Europe) Ltd [2011] ScotCS CSOH_15 (27 January 2011)

Green Island Organics Ltd v QBE Insurance (Europe) Ltd [2011] ScotCS CSOH_15 (27 January 2011)

The court held that, on a proper construction of the insurance contract, sea lice are pathogens and, if their presence is shown to have a primary causative relationship to the mortality of the insured fish, they fall within the contractual definition of 'Disease' in the Disease Extension Clause. The language of the contract, the warranty clause, and the evidence of industry practice and understanding all support the interpretation that mortality caused by sea lice infestation is covered under the policy's disease cover. The explicit exclusion of sea lice in Peril 3 does not operate as a general exclusion from disease cover. The construction favoured by the pursuers accords with business...

Citation
[2011] ScotCS CSOH_15
Parties
Pursuer: Green Island Organics Ltd; Defender: QBE Insurance (Europe) Ltd
Jurisdiction
Scotland
Judgment Date
27 January 2011
Procedural Posture
Commercial Insurance Claim / Proof Before Answer on Liability
Outcome
Decree for payment in favour of the pursuers (Green Island Organics Ltd) against the defenders (QBE Insurance (Europe) Ltd) for the balance of indemnity under the policy.
Legal Topics
Interpretation of Insurance Contracts, Aquaculture Insurance, Definition of Disease in Policy, Coverage for Sea Lice Infestation
Insurance Law Commercial Law Interpretation of Insurance Contracts Aquaculture Insurance Definition of Disease in Policy Coverage for Sea Lice Infestation

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Parties

Green Island Organics Ltd

Pursuer

QBE Insurance (Europe) Ltd

Defender

Procedural Posture

Commercial Insurance Claim / Proof Before Answer on Liability

Legal Issues

  1. 1 Whether mortality of fish caused by sea lice infestation is covered as 'disease' under the insurance policy's Disease Extension Clause
  2. 2 Proper construction of the insurance contract regarding coverage for sea lice

Ratio Decidendi

The court held that, on a proper construction of the insurance contract, sea lice are pathogens and, if their presence is shown to have a primary causative relationship to the mortality of the insured fish, they fall within the contractual definition of 'Disease' in the Disease Extension Clause. The language of the contract, the warranty clause, and the evidence of industry practice and understanding all support the interpretation that mortality caused by sea lice infestation is covered under the policy's disease cover. The explicit exclusion of sea lice in Peril 3 does not operate as a general exclusion from disease cover. The construction favoured by the pursuers accords with business...

Court Disposition

Decree for payment in favour of the pursuers (Green Island Organics Ltd) against the defenders (QBE Insurance (Europe) Ltd) for the balance of indemnity under the policy.

Orders

  • Defenders ordered to pay the pursuers the balance of indemnity due under the insurance policy for losses arising from sea lice infestation.