Construction of 'the description of the property' insured under a POLICY

construction of the description of the property

In Property and Marine Insurance, the policy ~ the contract of Insurance is upon a specific property which becomes the subject matter of insurance.

Identifying the subject matter to be insured and fixing a value to it – that is the sum insured become the fundamental aspects ~ once this is done with clarity, a claim arising out of an insured peril – can be successfully preferred and gotten.  It is a material property that is insured against a physical damage causing a monetary loss to the policy holder……… this description covers cardinal principles of tenable claim viz.,

a)       existence of property

b)       that property becoming the subject matter of insurance

c)       physical loss or damage to such property

d)       being caused by an insured peril

e)       that loss or damage being quantified in monetary terms

f)         and such loss becoming the claim being preferred

g)       by the policy holder who is prejudiced by the loss

h)       amount preferred being governed by the sum insured

i)          tenability being governed by the terms and conditions of the policy.

In a Contract of Insurance – upon acceptance of a proposal and payment of consideration, the Insurer promises to indemnify the Insured against loss or damage caused by operation of insured perils.  Other than making good the loss or damage to the affected property, there could something in the nature of ‘loss of profit’ or ‘loss of rent’.

The description in the policy is sufficient if it enables the subject-matter to be identified ; it need not describe every detail. The construction of the description of the property however  must be conformable to the true intention of the parties.

To prefer a claim under a policy, it must be proved that the affected item being claimed for, is the one insured under the policy.  In 1811, a coach-plater and cow-keeper in Newton Street, High Holborn, a street in Central London – insured his ‘stock-in-trade, household furniture, linen, wearing apparel and plate’.

After effecting the policy, he purchased a large quantity of linen on speculation and during the period of the policy, there was fire in the premises gutting all that were stored inside. 

The commonest of the interpretations would be – ‘stock of linen’ covered – linen is destroyed by fire – claim payable in full to the extent of loss.

But Gentlemen, in UK by the panel who knew well Insurance and Law, it was held that the item damaged and claimed for ‘linen; was not covered by the policy…….

Atomizing the construction of the description of the property contained in the policy, it was stated that the true intention was to confine ‘linen’ to household linen or apparel, on account of the other words which immediately precede and follow it.  Placed as it was between ‘household furniture’ and ‘wearing apparel’ – it was to mean the assured’s own personal household linen and not the linen subsequently purchased on speculation.

Therefore  it was held not to be covered by the policy.  Have been searching for full judgment of more details of ‘Watchhorn V. Langford – 3 Camp. 422

In case any of you have do share this with me, for it would make a very interesting read for sure……..

With regards – S. Sampathkumar

20^th Nov. 2o13