IRU Legal Assistance Network 8 th Symposium of Lawyers “Conditions to be met by transport operators to have their liabilities covered by insurers” Andrew Messent Partner, HBJ Gateley Wareing, London

Background Matters Contract of Carriage Contract of Insurance

Contract of Carriage No compulsorily applicable terms for domestic carriage Freedom of contract – subject to UCTA Various standard terms in common use Contractual terms must be properly incorporated If no terms agreed, common law rules apply

Contract of Insurance Marine Insurance Act 1906 provides statutory background, but cover is subject to terms of policy, in particular any policy exclusions Unfair Contract Terms Act is not applicable –but note supervisory jurisdiction of Financial Services Ombudsman in some cases Contract of insurance is a contract of “utmost good faith”

Disclosure obligations: When arranging cover, the assured must disclose every “material circumstance” which is known to him A material circumstance is anything which would “influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk” The assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him If the assured fails to make such disclosure, the insurer may avoid the contract

Misrepresentation: Every “material representation” made by the assured before the contract is concluded must be true A material representation is one which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk If a material representation is untrue, the insurer may avoid the contract Note: Position of Broker These obligations also arise on renewal

Policy Coverage Policy limits Policy conditions Policy exclusions

Policy Limits For example: Number of vehicles Geographical area Types of goods Categories of event

Policy Conditions Consequences of breach will depend on nature of term broken and on terms of policy –Significance of proposal form Conditions precedent to liability of insurer For example: –Incorporation of conditions of carriage –Selection of drivers and other staff –Maintenance of vehicles –Notification of claims

Policy Exclusions For example: Exclusion of particular categories of goods Exclusion of particular types of claim Cover may be either excluded or subject to special terms

Conclusions Essential that the transport operator carefully addresses his insurance requirements, and puts systems in place to ensure proper compliance with any policy requirements.