Damage under FIRE Policy due to Fire Fighting

[jkm_goa]

Dear All

 

I am conducting a survey under FIRE Policy for damages caused to stock due to fire fighting. A Fire occured in a commercial building & the fire brigade authority have used water to fight the fire. Due to the same a shop on the ground floor was affected due to water used for fire fighting. No fire has taken place in the affected premises. The satnd of the underwriter is that the fire would not have affected the insured premises. Pls advice regarding liablity under the policy.

 

Regards

Vishal  

[Vinod Agrawal]

Dear All,

 

The proximate cause in this case is fire. Had the fire not occurred in the

complex there would have been no water pouring. The loss and damages

caused proximately due to fire are covered under the policy. Eeven the

smoke damages caused in a commercial complex due to fire elsewhere

are covered.

 

Regards,

 

Vinod Agrawal,

Indore- 09827028337

---

[Tony Fernandez]

Dear Brothers,

 

As a practising Average Adjuster, (I have long relinquished the profession of surveying, when I decided long before IRDA came on the scene, not to renew my licence in 1996, which I obtained in 1976), before which I have carried out all types of insurance surveys (except those relating to motor, crop and cattle).

 

I wish to share some thoughts on the aspect of damage to insured property due to water used in fire-fighting operations. 

 

From a Marine Insurance point of view, such a damage is a "general average sacrifice" and is distinguished from "particular average damage" as given in the Marine Insurance Act 1906/1963.

 

The concept of General Average long pre-dates insurance and is  based on the principle of equity. General Average is a "marine liability" and is peculiar only to marine adventures, not being applicable to on land, rail or air. 

 

Liability for General Average Sacrifice / General Average Expenditure and General Average Contribution is one of the risks insured against both under Hull and Cargo Policies.

 

General Average sacrifices are always "intentional" in nature while particular average damages are always "accidental" in nature.

 

Assuming a ship was on fire all damages caused by the fire are "particular average" damages, assuming they were partial losses and further that they were insured and were damaged as a result of a peril insured against. Fire is a peril insured against in all marine policies (Hull or Cargo). Any damages caused by water used in fire-fighting would not fall under fire damage, but would be a general average sacrifice, in case the fire-fighting operations were carried out to save the ship and cargo on board.  Thus, if the cargo was not on board the ship (but was stored ashore) and was damaged by the water used in fire-fighting, then such damages would not be general average sacrifical damages.

 

Now turning our attention to a a non-marine policy, such as a fire policy, which incidentally is a "named perils" policy, strictly speaking there is no liability for any loss or damage to the insured property consequent to damages due to fire-fighting operations in the same premises for extinguishing fire in the insured property, as such a loss or damaged is not proximately caused by fire.  However, it has been the practice for Underwriters to treat the loss as if it was a loss caused proximately by fire based on the logic that in the absence of fire-fighting operations, the insured property could have been damaged by fire. Since this depends on the underwriter concerned, it is adviseable for an insured to obtain additional cover for loss or damage caused by water used in fire-fighting in the same premises to other insured property at the time of taking our a Fire Policy, if he so desires to do from a risk exposure / risk management points of view.

 

However, in the case mentioned, it appears that the property that was damaged was different and distinct from the property on which fire-fighting operations were carried out.  If this indeed is the case, it is submitted that the underwriters covering the said property against loss or damaged proximately caused by fire are well within their rights to deny liability as the damage to the insured property was not proximately caused by an insured peril.

 

It is submitted that in the case mentioned such damage is not directly caused by fire, but is a consequential loss, not covered under a Fire Policy.

 

Warm regards.

 

Tony Fernandez

Average Adjuster, Mediator, Arbitrator, Accident Investigator & Learning Facilitator

Visiting Professor of Maritime Law and Insurance Law - University of Mumbai.

Vinod Agrawal <avi...@gmail.com> wrote:

---

Talk is cheap. Use Yahoo! Messenger to make PC-to-Phone calls. Great rates starting at 1¢/min.

[M Sainani]

Dear All

 

I wish to put forward referance of Jamica cases which demonstrate Doctorine of  Proximate Cause, in light of which the loss to the Shop due to water damages appear falling within purview of policy.

 

Regards

 

M S Sainani

 

[Arun Arora]

Dear All,

I am of the strong opinion that the 'fire' is the proximate and most
efficient cause for the damages sustained by the insured in the subject
case.

A standard wording on proximate cause has been invariably sited by all
as follows:

Proximate Cause - The dominate cause of loss or damage; an unbroken
chain of events between the occurrence of an insured peril and the
damage to property. As an illustration, water damage occurring from
fire-fighting activities is covered under the fire policy because fire
was the proximate cause of the loss.

On this, Mowbray and Blanchard, in their authoritative Insurance, have
this to say about fire loss under the standard Fire Policy:

The loss must have been the immediate result of fire, as in the burning
of a building, or the result of an unbroken chain of events, with fire
as the primary cause of the events. For example, a four-alarm fire
might gut a warehouse with the result that billowing smoke, wind-blown
debris and chemicals and water from fire-fighting activity damaged the
adjoining property of a neighbor without actual burning of the latter
property. The loss to the neighboring building would be within the
scope of the fire peril covered by the insurance applicable to it.

Let's take an example which illustrates status of damages to insured
property due to fire which originated due to an explosion in a
neighboring property:

In Insurance Co. v. Tweed, 7 Wall. 44, cotton in a warehouse was
insured against fire by a policy which provided that the insurers
should not be liable for losses which might 'happen or take place by
means of any invasion, insurrection, riot, or civil commotion, or any
military or usurped power, explosion, earthquake, or hurricane.' An
explosion took place in one warehouse resulting in a conflagration
which spread to a second warehouse, and thence, in the course of the
wind blowing at the time, to a third warehouse, containing the insured
cotton. This court held that the loss of the cotton was caused by the
explosion, and therefore the insurer was not liable, and speaking by
Mr. Justice Miller, said: 'The only question to be decided in the case
is whether the fire which destroyed plaintiff's cotton happened or took
place by means of the explosion; for, if it did, the defendant is not
liable, by the express terms of the contract. That the explosion was in
some sense the cause of the fire is not denied, but it is claimed that
its relation was too remote to bring the case within the exception of
the policy. And we have had cited to us a general review of the
doctrine of proximate and remote causes, [171 U.S. 450, 455] as it
has arisen and been decided in the courts in a great variety of cases.'
'One of the most valuable of the criteria furnished us by these
authorities is to ascertain whether any new cause has intervened
between the fact accomplished and the alleged cause. If a new force or
power has intervened, of itself sufficient to stand as the cause of the
misfortune, the other must be considered as too remote. In the present
case, we think there is no such new cause. The explosion undoubtedly
produced or set in operation the fire which burned the plaintiff's
cotton. The fact that it was carried to the cotton by first burning
another building supplies no new force or power which caused the
burning. Nor can the accidental circumstance that the wind was blowing
in a direction to favor the progress of the fire towards the warehouse
be considered a new cause.' 'We are clearly of opinion that the
explosion was the cause of the fire in this case.' Id. 51, 52. In that
case, as has been since observed by Mr. Justice Strong in delivering
judgment in a case to be presently referred to more particularly, 'it
was, in effect, ruled that the efficient cause, the one that set others
in motion, is the cause to which the loss is to be attributed, though
the other causes may follow it and operate more immediately in
producing the disaster.' Insurance Co. v. Boon, 95 U.S. 117 , 131.

Reproducing a few lines from above:

the efficient cause, the one that set others in motion (fire in other
premises in same/adjoining building), is the cause to which the loss is
to be attributed, though the other causes (water damage due to
fire-fighting) may follow it and operate more immediately in producing
the disaster.

Regards,

Arun Arora

> > *Vinod Agrawal <avi...@gmail.com>* wrote:
> >
> > Dear All,
> >
> > The proximate cause in this case is fire. Had the fire not occurred in the
> > complex there would have been no water pouring. The loss and damages
> > caused proximately due to fire are covered under the policy. Eeven the
> > smoke damages caused in a commercial complex due to fire elsewhere
> > are covered.
> >
> > Regards,
> >
> > Vinod Agrawal,
> > Indore- 09827028337

> > ------------------------------

> > Dear All
> >
> > I am conducting a survey under FIRE Policy for damages caused to stock due
> > to fire fighting. A Fire occured in a commercial building & the fire brigade
> > authority have used water to fight the fire. Due to the same a shop on the
> > ground floor was affected due to water used for fire fighting. No fire has
> > taken place in the affected premises. The satnd of the underwriter is that
> > the fire would not have affected the insured premises. Pls advice regarding
> > liablity under the policy.
> >
> > Regards
> > Vishal
> >

> > ------------------------------
> >
> > ------------------------------

> > Talk is cheap. Use Yahoo! Messenger to make PC-to-Phone calls. Great rates
> > starting at 1¢/min.
> > >
> >

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> >
> >
>
> ------=_Part_21296_16748784.1159179637985
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> Content-Transfer-Encoding: quoted-printable
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>
> <div>Dear All</div>
> <div>&nbsp;</div>
> <div>I&nbsp;wish to put forward referance of Jamica cases which demonstrate Doctorine of&nbsp; Proximate Cause, in light of which the loss to the Shop due to water damages appear falling within purview of policy.</div>
> <div>&nbsp;</div>
> <div>Regards</div>
> <div>&nbsp;</div>
> <div>M S Sainani<br><br>&nbsp;</div>
> <div><span class="gmail_quote">On 9/24/06, <b class="gmail_sendername">Tony Fernandez</b> &lt;<a href="mailto:tonyfern...@yahoo.com">tonyfern...@yahoo.com</a>&gt; wrote:</span>
> <blockquote class="gmail_quote" style="PADDING-LEFT: 1ex; MARGIN: 0px 0px 0px 0.8ex; BORDER-LEFT: #ccc 1px solid">
> <div>Dear Brothers,</div>
> <div>&nbsp;</div>
> <div>As a practising Average Adjuster, (I have long relinquished the profession of surveying, when I decided long before IRDA came on the scene, not to renew my licence in 1996, which I obtained in 1976), before which I have carried out all types of insurance surveys (except those relating to motor, crop and cattle).
> </div>
> <div>&nbsp;</div>
> <div>I wish to share some thoughts on the aspect of damage to insured property due to water used in fire-fighting operations.&nbsp;</div>
> <div>&nbsp;</div>
> <div>From a Marine Insurance point of view, such a&nbsp;damage is a &quot;general average sacrifice&quot; and is&nbsp;distinguished from &quot;particular average damage&quot; as given in the Marine Insurance Act 1906/1963. </div>
> <div>&nbsp;</div>
> <div>The concept of General Average long pre-dates insurance and is&nbsp; based on the principle of equity. General Average is a&nbsp;&quot;marine liability&quot; and&nbsp;is peculiar only to marine adventures, not being applicable to on land, rail or air.&nbsp;
> </div>
> <div>&nbsp;</div>
> <div>Liability for General&nbsp;Average Sacrifice / General Average Expenditure and General Average Contribution is one of the risks insured against&nbsp;both under Hull and Cargo&nbsp;Policies. </div>
> <div>&nbsp;</div>
> <div>General Average sacrifices are always &quot;intentional&quot; in nature&nbsp;while particular average damages are always &quot;accidental&quot; in nature. </div>
> <div>&nbsp;</div>
> <div>Assuming a ship was on fire all damages caused by the fire are &quot;particular average&quot; damages, assuming they were partial losses and further that they were insured and were damaged as a result of a peril insured against. Fire is a peril insured against in all marine policies (Hull or Cargo). Any damages caused by water used in fire-fighting would not fall under fire damage, but would be a general average sacrifice, in case the fire-fighting operations were carried out to save the ship and cargo on board.&nbsp; Thus, if the cargo was not on board the ship (but was stored ashore) and was damaged by the water used in fire-fighting, then such damages would not be general average sacrifical damages.
> </div>
> <div>&nbsp;</div>
> <div>Now turning our attention to a a&nbsp;non-marine policy, such as a fire policy, which incidentally is a &quot;named perils&quot; policy, strictly speaking there is no liability for any loss or damage to the insured property consequent to damages due to fire-fighting operations in the same premises for extinguishing fire&nbsp;in the insured property, as such a loss or damaged is not proximately caused by fire.&nbsp; However, it&nbsp;has&nbsp;been&nbsp;the practice&nbsp;for Underwriters to treat the loss as if it was a loss caused proximately by fire based on the logic that in the absence of fire-fighting operations, the insured property could have been damaged by fire. Since this depends on the underwriter concerned, it is adviseable for an insured to obtain additional cover for loss or damage caused by water used in fire-fighting in the same premises to other insured property at the time of taking our a Fire Policy, if he so desires to do from a risk exposure / risk management points of view.
> </div>
> <div>&nbsp;</div>
> <div>However, in the case mentioned, it appears that the property that was damaged was different and distinct from the property on which fire-fighting operations were carried out.&nbsp; If this indeed is the case, it is submitted that the underwriters covering the said property against loss or damaged proximately caused by fire are well within their rights to deny liability as the damage to the insured property was not proximately caused by an insured peril.
> </div>
> <div>&nbsp;</div>
> <div>It is submitted that in the case mentioned such damage is not directly caused by fire, but is a consequential loss, not covered under a Fire Policy. </div>
> <div>&nbsp;</div>
> <div>Warm&nbsp;regards.</div>
> <div>&nbsp;</div>
> <div>Tony Fernandez</div>
> <div>Average Adjuster, Mediator, Arbitrator, Accident Investigator &amp; Learning Facilitator</div>
> <div>Visiting Professor of Maritime Law and Insurance Law - University of Mumbai.<span class="q"><br><br><b><i>Vinod Agrawal &lt;<a onclick="return top.js.OpenExtLink(window,event,this)" href="mailto:avi...@gmail.com" target="_blank">
> avi...@gmail.com</a>&gt;</i></b> wrote:</span></div>
> <blockquote style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid"><span class="q">
> <div>Dear All,</div>
> <div>&nbsp;</div>
> <div>The proximate cause in this case is fire. Had the fire not occurred in the</div>
> <div>complex there would have been no water pouring. The loss and damages</div>
> <div>caused proximately due to fire are covered under the policy. Eeven the</div>
> <div>smoke damages caused in a commercial complex due to fire elsewhere</div>
> <div>are covered.</div>
> <div>&nbsp;</div>
> <div>Regards,</div>
> <div>&nbsp;</div>
> <div>Vinod Agrawal,</div>
> <div>Indore- 09827028337</div>
> <div>
> <hr>
> </div>
> <div><font face="Arial" size="2">Dear All</font></div>
> <div><font face="Arial" size="2"></font>&nbsp;</div>
> <div><font face="Arial" size="2">I am conducting a survey under FIRE Policy for damages caused to stock due to fire fighting. A Fire occured in a commercial building &amp; the fire brigade authority have used water to fight the fire. Due to the same a shop on the ground floor was affected due to water used for fire fighting. No fire has taken place in the affected premises. The satnd of the underwriter is that the fire would not have affected the insured premises. Pls advice&nbsp;regarding liablity under the policy.
> </font></div>
> <div><font face="Arial" size="2"></font>&nbsp;</div>
> <div><font face="Arial" size="2">Regards</font></div>
> <div><font face="Arial" size="2">Vishal </font>&nbsp;</div><br>
> <hr>
> <br></span><span class="ad">
> <hr size="1">
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> Great rates starting at 1¢/min.<span class="q"><br>
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[M Sainani]

Doctrine of proximate cause very well explained, looks like water losses in the subject case referred at inception falls with n purview of policy.

 

M S Sainani

 

> <div>Visiting Professor of Maritime Law and Insurance Law - University of Mumbai.<span class="q"><br><br><b><i>Vinod Agrawal &lt;<a onclick="return top.js.OpenExtLink (window,event,this)" href="mailto:avi...@gmail.com" target="_blank">

[happyshailesh]

Very good going dear friends.

I would just like to add one of my surveys - wherein an Insured's
factory premises' Glass windows got broken and building suffered cracks
and A.C. sheets roof got broken too, all due to tremors amd thunders (
concussion) of a huge fire that took place almost 200 m i.e.3 blocks
away from Insrued's factory. This claim was entertained and paid
graciously by the Insurance Company under Std.Fire policy.

If this claim can be paid, why not the case which is sighted here. As
my dear colleagues Sainanni Ji and Arun have said, unless there is an
external source breaking the chain of events and a deliberate attempt
to aggravate the loss, claims under such circumstances have to be
considered to maintain the sanctity of insurace cover granted.

Now, drawing a line, we as Surveyor can pose our firm and independent
view and let the Insurance Co, do its job. Atter all to repudiate a
claim, they also have to have sufficient reasons and ground. Why not
invite the Insurance Company officials to also take active part in
this debate. Worth trying.

Regards to all,
Shailesh Shah
Vadodara

[M Sainani]

I wish to draw your attetion to the fact that there are many groups dedicated to Insurance & lot of unrelated matter is sent on these. This group is initially meant for Adjusters only and with passage of time if group members feel that this be opened up to others also it would be done. For the time being the let us restrict this to Surveyors / Loss Adjusters / Assessors only, I hope the members would agree on this.

Sainani M S

9414168144

 

[happyshailesh]

Dear Sainani,
I appreciate what is said in your response. I would like to differ in
one thing. By inviting Insurance Company officers also to take part in
our dialogue, we are actually breaking the wall - which could lead us
to the destination we are looking forward to i.e. Transparency and fair
practice. Just give it a thought. Nothing to hurry up.
Regards,
Shailesh

[M Sainani]

Agreed, but let the group be stable amongst ourselves & later on we can open it to other persons, initially Insurers.

 

not allowing others including Insurers doesn't mean that we don't want to remain transparent, on the contrary we wish that there should be absolute transperency but there has to be concenses on many issues amongst oursevles that can happen if the freternity intracts regularly, churns out the real stuff & take a stand on critical & difficult issues on which we can have a sort of One to One dialogue with Insurers also.

 

I request elders to favour the group with their views.

 

Regards to all

 

M S Sainani

[Satish Saran]

Dear Mr. Tony Fernandez/Mr. Sainani/Mr. Vinod Agarwal/All others

 

The word "proximate cause" has been used and defined. I have gone through the Fire Policy and do not find the word "proximate" stated anywhere. The wordings are - " directly caused or caused " I would like to know how does this word "proximate" come into play.

 

Secondly if we go by the defination of "proximate cause' as mentioned by you- what caused the recent loss due to water logging in Mumbai? I understand the losses were covered under inundation and paid. For that matter is not flood directly caused by heavy rains in the catchment areas without any other independent cause? So should losses by floods be excluded since the proximate cause would be rains- a peril not covered?

 

regards

satish saran

 

[Vinod Agrawal]

Dear Mr. Satish Saran and other friends,

 

The policy will never have word `proximate' or for that matter

`market value'. `Directly caused or caused due to' is interpreted

with the help of doctrine of proximate cause. Similarly theory

of indemnity gives the word `value' the meaning of `market

value'. Hope this clarifies your first point.

 

As regards water logging damages in Mumbai should be viewed as

caused due to inundation or should be considered as rain water

damage? Please consider the fact that can flood or inundation be

caused without heavy rains? Does heavy rains always result in flood/

inundation. The accumulation of water due to non-receeding or

water exceeding its normal confines is the interruption in chain of events

set in motion by heavy rains. This is the reason that flood and inundation

have been covered as an addon peril and normal rain water damages

not covered. Here the theory of insurable loss comes in.

 

Regards,

 

Vinod Agrawal,

Indore. 098270 28337.

[Satish Saran]

Dear Vinodji

You have said interpretation. Interpretation has to be from some authentic source. Since Policy Document is an agreement document any interpretation has to be from judiciary. The two parties to the agreement can have their own interpretation which may be same or divergent. Is there any judicial pronouncement in respect of " cause" to be interpreted as "proximate cause" and what is meant by "proximate cause". This is what I wanted to know.

 

Policies do have expilicit wordings for arriving at the compensation amount. The word "market value" has been used in the Motor Policy. Secondly Value of a commodity is not necessarily the market value. Indemnity means putting back the insured in the same financial position as he was prior to the acident. The market value and the intrinsic value of a comodity generally differs. You will observe that the word indemnity has no been used in all the policies.

 

You have very correctly said chain of events. Chain of events is analogous to chain reaction (normally used for neuclear reactions). Proximate cause as per the definition you have quoted is the starting point of the chain of events. Should we not consider rains as the proximate cause?

 

Floods can be caused without heavy rains also. In the hilly and snow fed channels floods are caused by melting of snow. It is also caused by bursting of artificial or natural dams formed because of landslide. This is very common in Nepal and the resultant floods severly affects North Bihar specially the Kosi river belt.

 

The experience of past couple of decades is that heavy rains has always caused inundation. This years events during monsoon through out the country is an example. There is no year when the Assama and North Bihar are not flooded during monsoon as and when there is a heavy rainfall.

 

Before 1980 an incident like that of Mumbai had always been rejected by the insurance companies. Example is that of flooding of Barauni Thermal Power Station in 1975 due to heavy and continuous rains. Interpretation changed after deluge of Calcutta (not Kolkata) around 1980. Presently interpretation of flood & inundation is such liberal that even if the water tap of a house/flat reamins open and results in flooding of the house/flat the insurance companies are paying the claims.

 

regards

satish saran

 

[Vinod Agrawal]

Dear Satishji,

 

I hope you have not recently joined the list. In this

discussions earlier Mr. Sainani and Mr. Arun Arora

have quoted judicial cases to support the `interpretation'

and when one says loss caused due to fire or flood or

inundation then how to determine whether it is `due to'

is guided by the doctrine of proximate cause.

 

Regards,

 

Vinod Agrawal,

Indore. 098270 28377.

[Satish Saran]

Dear Vinodji,

The cases cited are of USA not our. Views of Tony Fernandez are not in confirmity with your views. Secondly the cases settled in USA do not hold good in our cpountry.

My question still remains unanswered. If the doctrine of proximate cause as mentioned by Mr. Arun Arora is accepted then why the proximate cause for loss in Mumbai was not rains? Which other independent force or power intervened between heavy rains and flooding of the city?

I agree with the views of Mr. Fernandez In the present case no liability rests on the insurers.

[Vinod Agrawal]

Dear Satishji,

 

In US or India the laws of land can defer but the interpretation theory remains the

same. We are living in a democratic Country and are free to hold different views.

 

In Mumbai floods the non-receeding of water due to unplanned urbanisation is

the effecient cause of inundation and not heavy rains alone.

 

Regards,

 

Vinod Agrawal,

Indore, 98270 28337.

[Anil Khubchandani]

Dear all

 

In my opinion the discussions may never be conclusive as it may be difficult to change the established practice of claim settlements. The definition of floods/inundation is abnormal rise in water level may it be due to heavy rains or a mere choke in local drain. If short circuit in electrical wiring is caused due to rat bite then what may be the proximate cause? Such basic principles may therefore not be changed at least by ourselves.

 

Regards

 

Anil Khubchandani

Bhopal

09826075885

[M Sainani]

Dear All,

 

I am trying to locate some good material on doctorine of Proximate Cause & Jamica cases and several other caases are classic examples for clearity on this issue & hopefully once I am able to locate cases I would post this for others to read.

 

Regards

 

M S Sainani

 

[happyshailesh]

Dear friends,
May I suggest a reading material to clear air of suspicion and doubts
on authenticity of words 'proximate cause', 'insurable interest' and
likewise. The book is named FIRE INSURANCE ( LAW & PRACTICE) written by
M. B. Gopalan and M.B. Raghavan (Advocates) Foreword by N. Rangachary-
Cairman of IRDA Cost Rs. 450/- of First edition 2002. Published by
Ketan Thakkar SNOW WHITE Publications Pvt. Ltd. Mumbai- Ph. 2080654,
2058242, 2053885

Regards,
Shailesh Shah
Cell- 98240 21192

[Satish Saran]

Dear Friends,
We have been discussing a lot about the interpretation of the Policy wordings and the coverage therein. I came across few relevant judgements of the Aupreme Court and extracts of which are quoted hereumnder. I feel they would be of interest to all,

The Apex Court in Case No.: Appeal (civil)  6277 of 2004, United India Insurance Co.Ltd. vs

M/s.Harchand Rai Chandan Lal, decided on 24/09/2004, observed that:

" The insurance policy has to be construed having reference only to the stipulations contained in it and no artificial farfetched meaning could be given to the words appearing in it. "

 

In the case of Oriental Insurance Co.Ltd. Vs.  Sony Cheriyan reported in (1999) 6 SCC 451 an insurance was taken out under the Motor Vehicles Act, 1988 in which their Lordships' observed:

"The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than  what is covered by the insurance policy."

 

Similarly in the case of General Assurance Society Ltd. Vs. Chandumull Jain and Anr. reported in  (1966) 3 SCR  500  the  Constitution Bench has observed that the   policy document being a contract and it has to be read strictly. It was observed,

" In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Looking at the proposal, the letter of acceptance and the cover notes, it is clear that a contract of insurance under the standard policy for fire and extended to cover flood, cyclone etc. had come into being."

 

Therefore, it is settled law that the terms of the contract has to be strictly read and natural meaning be given to it. No outside aid should be sought unless the meaning is ambiguous.

best wishes
Satish Saran


---------- Forwarded message ----------
From: Satish Saran <satis...@gmail.com>
Date: 07-Oct-2006 03:25
Subject: Re: Re: Re: Damage under FIRE Policy due to Fire Fighting
To: Sumant Sud <suma...@gmail.com>

Dear Sumant/Dear All,

Right. But which is the dominant cause? High Tide or heavy rains or unplanned urbanisation. Unplanned urbanisation is neither a force nor an event. High Tide is a regular feature and Mumbai does not get flooded everytme there is a hightide or during normal rains.

The Claims of Calcutta floods were decided on the ground that due to high tide in Hoogly the water back flowed through the drains. overflowing the drains. Since the water drains(channels) had overflowed it was a case of flood. Earlier in similar situation at Barauni Thermal Power Station, which is situated on the bank of the Ganges. The river was in high spate. Very heavy rains and backwaters of the river caused flooding of the BTPS.  Insurers rejected the claim on the plea that inundaion due to rain water is not covered, At that time flood and inundation were treated as one peril and flood meant overflowing of river banks. Losses due to inundation following floods used to be paid. But to-day inundation is a separate peril and inundation due to any cause is acepted as covered.

As a practising surveyors we are interested in knowing how the theory of proximate cause is interpreted in dfferent cases. Through this forum we can exchange information about these different cases. Information about cases where contradictory views have been taken by the Insurers and judiciary. In some cases insurers have taken immediate cause as proximate cause while in others it is an earlier event.

One such case I know of is that of a policeman who was a heart patient and who was deployed for election duty in Patna District in a tense area. Policeman was reluctant but could not disobey. He was also not feeling well that morning. This Policeman suffered a heart attack while on duty and died. Insurers UIIC rejected the claim on the plea that proximate cause was heart attack and it is not an accidental death since the Policeman was a heart patient. High court decded the case in favour of the Policeman terming his death as an accidental happening tracing the proximate cause to abnormal mental pressure & strain on Policeman due to tension in his area.
Another interesting case is that of damage by fire to stocks in a warehouse. There was thunderstorm during which time there was shortcircuit in the electric wires near a street pole The electric connection to the warehouse was from this pole. Sparks from this short circuit caused the fire. DO opined that the proximate cause was storm, which was upheald by RO but rejecetd by HO and the claim was paid. Insured had not taken STFI cover.

 

Dear Friends we are like five blind men who thought differently about elephant based on the portion of beast he touched. The Blind men were wise to exchange their opinions and understand how an elephants looks like.

satish saran

 

On 05/10/06, Sumant Sud <suma...@gmail.com > wrote:

Dear Satish

 

As per my understanding, Mumbai gets flooded due to heavy rains and high tide simultaneously.

 

Sumant Sud

 

On 10/4/06, Satish Saran <satis...@gmail.com > wrote: