i-law

Lloyd's Maritime and Commercial Law Quarterly

Aggravation of risk during the insurance period

Malcolm Clarke *

The English lawyer now looks across the Channel not only perhaps when planning holidays but also to spot any legal clouds on the horizon. Nowadays the prevailing legal winds are not from the West but from the South East. One possibility is rules of law on aggravation of risk during the insurance period for non-marine insurance. This paper looks first at the received position in England and some other countries of common law, next at what is brewing in Brussels and the current state of legislation in Europe, and lastly at what kind of prescription we may have to swallow.

I. INTRODUCTION

Rumours are abroad, abroad in Europe, that there should be rules of law on aggravation of risk during the insurance period for non-marine insurance.1 If there is to be new law at all, its contents, it is submitted, should be evaluated with certain factors in mind. (A) The main reason for insurance from the insured’s point of view is certainty: certainty of cost2 and, above all, certainty of cover3 and associated peace of mind.4 (B) Society at large seeks to promote effective compensation and loss spreading, a factor that overlaps Factor A, in order to foster human activity—but potentially useful human activity: society also wishes to discourage wanton or wasteful conduct in human affairs.5 (C) The insurer, as well as society at large, has an interest in risk management and loss prevention. Factor C overlaps Factor B in its concern to discourage wanton or wasteful conduct. Thus it suggests rules that encourage or at least allow some degree of intervention or control by the insurer over the conduct of the policyholder during as well as immediately before a period of insurance cover. (D) Insurance is for the foolish as well as the wise. Too much

109

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.