Liability Denial in Insurance Claims - Coursework Example

Liability Denial in Insurance Claims: Case study of Mr. A Introduction The law of liability insurance is always controversial whenever the insurer feels prejudiced by the insurance company following the occurrence of an event against which the property was insured.1 In the case presented before us, a client herein referred to as Mr. A lost his second hand car in a burglary event when unknown person(s) drove away the car while he was unloading his electrical tools to the garage. On reporting the incident, the insurance company denied liability on ground that Mr. A failed to exercise practicable caution to remove the loss of his car. This paper therefore examines the legal question in the care hitherto with the aim to prove whether the insurance company was really justified in its denial of liability.2 Moreover, the paper provides a succinct evaluation of the applicable laws that Mr. A can use to pursue his claim for indemnity. However, the arguments presented in this case will examine both sides of the case so as to avoid biasness in unravelling the evidence and defence available to the plaintiff and defendant. Presentation of Facts From the arguments presented as a justification ground of liability denial, the defendant implied it owed the plaintiff the duty of protection. 3 It also suggested that the insured was obligated to observe all practicable measures of precaution to remove or limit the risk of loss to the insured car. Well, the plaintiff has not denied the existence of that condition. If he actually failed to comply by the aforementioned term, the defendants claim would be admissible.4 It is also imperative to consider the fact that the residence of Mr. A was generally known to have no any reasonable history of crime. Secondly, it is true that Mr. A always removed his electrician tools from the car to garage to reduce the risk of their potential loss. That act on its own is flitch too ponder. Moreover, it is clearly emerging without a doubt that there was a garage in the plaintiff’s premises. Instead, the plaintiff chose to park his car outside the garage based on the general opinion and own judgment that the area has no incidences of crime. Legal Claims Ideally, the court will agree that the parties represented case before us were legally bound by the insurance contract taken by Mr. A. Trough the policy holder, the defendant vouched its integrity to indemnify the insured in the event that he lost the property through stealing or any other form of robbery.5 However, such indemnity would only be ratified if both parties observed the terms and conditions agreed upon including reasonable exercise of precaution to remove or reduce the risk of loss to the insured second hand car. According to the defendant, Mr. A failed to comply with the prerequisite condition to remove or reduce the risk of loss. As such, it denied liability. Presentation of evidence and defence rebuttals First and foremost, prelude studies indicate that the residential area of Mr. A was of low crime rate. That on its own implied that there was potential crime in the residence anyway. Secondly, despite the fact the plaintiff lived with his mother, it has not so far been brought to the attention of this court that the plaintiff’s mother owned a car. Moreover, there is no evidence whatsoever ascertaining that there was not enough space in the said garage to accommodate Mr. A’s car. In addition, we are not told that other residents of Mr. A’s neighbourhood were also parking their cars outside their garages overnight. It seems therefore that his decision and choice to park the car outside the garage was only based on unfounded opinion. From a different point of view, the court should give the plaintiff some benefit of doubt by taking precaution not to leave his tools in the car overnight. If he had resolved to leave his tools in the car overnight, then he would ideally be increasing the risk of them being stolen. Any reasonable person would agree with that point too. Furthermore, if the residence was really safe as insinuated by unsubstantiated opinion of low crime rate, then there would be no reason at all to offload the car. However, the plaintiff confirmed the uncertainty of such opinion by taking practicable measure to reduce the loss of his tools by routinely offloading them into the garage. Deducing for the safety measure taken by Mr. A with regard to all his tools, it is rather clear that even the plaintiff himself ascertained that a car parked outside a garage is overtly predisposed to potential risk of burglary. It is further implied by the plaintiff’s action that no reasonable person would imagine when a crime would take place and what the thieves would carry away. In any case, thieves do not normal announce what they intend to steal under reasonable circumstances until the robbery has taken place as illustrated in Soole v. Royal Insurance Co. [1971] 2 Lloyd’s Rep, 332.6 Anybody would expect Mr. A to selectively offload the car and leave the rest of his tools therein. Based on experience and the observed tactic of competent attorneys, someone may want to know what item is more valuable and therefore worth securing, between a second hand car and trainee electricians tools. It is reasonably safe to believe that trainee electricians would not have gained sufficient expertise experience to handle sophisticated tools whose worth can match the price of a car. Inasmuch as that remains the case, Mr. A valued his tools and therefore took reasonable measures to reduce the risk of their loss by whatever means including overnight robbery by unknown thief or thieves, just to emphasize. Practically, a reasonable person would value that car than novice’ tools. Also, the plaintiff had made a routine of always offloading his tools from the car to the garage in multiple trips. Taking such routine into account, the plaintiff created a conspicuous pattern of insecurity even if he deemed his action as precautious. Moreover, he also painted a picture that his was deficient of security systems including anti-burglary alarm or automatic self-lock. Therefore, any interested thief would make away with the car if he could access the ignition key. Upto this point, the plaintiffs of his second hand car. Perhaps, Mr. A noticed some unfamiliar person in the neighbourhood and he failed to raise alarm. Even if that is not the case, it is unclear why he left the key in his car on the fateful evening even if he was just going to the garage. If his cautious routine of always offloading the tools from the car is anything to by, then it is reasonably unexpected for such a wary person to leave the ignition key in the car for whatever reason. With all these in mind, Mr. A’s failure to lock the car was both an implied reasonable act of negligence.7 Conclusion Lastly, the unsubstantiated sequence of events on the fateful evening perpetually confirmed that the plaintiff was negligent when he left the key in his car.8 Such connotations and personal acts of Mr. A amounted to negligence thereby compromising the agreed conditions and policy terms. To that end, we rest our case with affirmative conviction that indeed the insurance company was justified to deny liability in plaintiff’s claim for the lost car. References Bharat, S., (1991). ‘Uncertain Litigation and Liability Insurance’. Rand Journal of Economics, 22: 218-213. Birds, John. (2010). Insurance Law in the United Kingdom. London: Kluwer Law International. Doherty, G., (2007). Understanding Claim-Made liability Insurance. Woodlands Hill, CA: Poms & Associates Insurance Brokers. Harvey, B and Parry, D., (2000). The Law of Consumer Protection and Fair Trading, 6th Ed. Charlton: Butterworths. Insurance Law Service, (2010). Making claims in Car Insurance [Online]. Available at: Accessed: 23 March 2012. Merkin, R., (2007). Insurance Law: An Introduction. London: Informa Law Review. Rejda, G., (2007). Principles of Risk Management and Insurance. London: Addison Wesley Publishing. Spaulding, W., (2011). Legal Liability and Negligence: Requirements for Negligence and defences in Insurance conflicts [Online]. Available at: Accessed: 23 March 2012. Teale, J., (2008). Insurance and Risk Management. Sydney: John Wiley & Sons Australia. Read More