Weekly Update - A Summary Of Recent Developments In Insurance, Reinsurance And Litigation Law - 24/11

THIS WEEK'S CASELAW

Gard Marine v Tunnicliffe & Ors

Construction of an excess or limit clause in a reinsurance policy/whether it scales to reflect assured's interest

http://www.bailii.org/ew/cases/EWHC/Comm/2011/1658.html

Clyde & Co (Bryan Young and Alex Reynolds) for claimant

The defendant reinsured the claimant's 12.5% line on an energy policy. The "Sum Insured" clause in the reinsurance policy provided as follows: "To pay up to Original Package Policy limits/amounts/sums insured excess of USD 250m (100%) any one occurrence of losses of the original placement". The dispute in this case was what the 100% referred to. Was it (a) the total insured value of the original lost asset (so that if, as here, the insured had a less than 100% interest, the excess point had to be "scaled" to reflect that lower interest) or (b) the insured's interest in the original lost asset.