Law of Insurance Contracts

Chapter 1



The English courts know an elephant when they see one, so too a contract of insurance. Judges speak, for example, of “those who are generally accepted as being insurers”.1 Until 1 December 2001, the legislation under which the conduct of insurance business was regulated in the United Kingdom2 did not attempt a definition or description of insurance or a contract of insurance. In England this was said to be because “no difficulty has arisen in practice, and therefore there has been no all-embracing definition, and the probability is that it is undesirable that there should be, because definitions tend sometimes to obscure and occasionally to exclude that which ought to be included”.3 The latter, of course, is also true of the train door and the aircraft cabin, which some people evidently find useful, perhaps because they like to know where they stand (or sit). English courts in the past have been not so much complacent as non-committal. The danger of definitions is that, being sharply inclusive, they may also be damagingly exclusive. Unrestrained by definition the courts can accommodate appropriate new products. Be that as it may, the response of writers in England to the issue of definition has always been rather different.4 There is a recognition, for example, that if there is one context in which it might be necessary to have a definition of the contract of insurance, it is in the context of government regulation of insurance business.5 That regulation underwent significant change, with the coming into force6 of the Financial Services and Markets Act 2000, which, together with the subordinate legislation made under that Act, appeared,7 for the first time, to attempt a statutory definition of the contract of insurance.8

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