Insurance Claim -- Turnover Exceeding Sum Insured Without Advance Premium -- Insurer not liable for loss occurring after turnover crosses insured sum without prior premium payment
(i) Insurance Act, 1938, S.64VB -- Insurance Claim -- Turnover Exceeding Sum Insured Without Advance Premium -- Insurer cannot assume risk beyond the sum insured unless premium for enhanced turnover is paid in advance or guaranteed within a stipulated period. Risk cannot be assumed earlier than the date of payment of premium. Where turnover-linked sum insured stands exhausted before the loss, liability of insurer is confined to the sum for which premium stood paid. (ii) Indian Contract Act, 1872, S.226 -- Insurance Claim -- Assurance by Divisional Manager on Coverage -- Authority of an agent extends only to acts necessary and usual for the authorised business. A Divisional Manager communicating with the insured and collecting premium does not have authority to enlarge the sum insured or dispense with a statutory precondition. Apparent authority cannot be created by the assertion of the agent alone. (iii) Indian Contract Act, 1872, S.196 -- Insurance Claim -- Ratification of Unauthorised Assurance -- Ratification cannot be used to defeat a mandatory statutory requirement governing assumption of insurance risk. An endorsement enhancing the sum insured after the loss is inconsistent with an intention to ratify an assurance of coverage given before the loss occurred. (iv) Insurance Act, 1938, S.64VB -- Insurance Claim -- Plea of Estoppel Against Insurer -- Estoppel cannot be invoked to defeat a statutory bar. Where an insurer accepts premium in instalments for its own convenience, this practice does not exempt it from compliance with the statutory precondition for attachment of risk.
LOGIN TO READCaseLawToday.com is powered by M/s Law Herald Infotech
