SC breather on insurance claims of shipping firms

In a judgement that could lead to hassle-free settlement of insurance claims, the Supreme Court has held that an insurance firm is liable to compensate for any damage of goods till it reaches the final destination.

The judgement would give relief to shipping companies engaged in imports as they can claim compensation for the stock destroyed before reaching the consignee at the final destination.

This means insurance coverage was valid till the goods were delivered to the consignees’ warehouse or other final warehouse.

A bench comprising Justice A K Mathur and Justice Tarun Chatterjee in a judgement delivered last week said the extended insurance policy would cover goods till they reached the destination in any part of the country.

The apex court dismissed United India Insurance Company’s appeal that challenged National Consumers Disputes Redressal Commission’s judgment asking it to pay Rs 4.94 crore in compensation to Great Eastern Shipping Company which lost 12,000 metric tons of sugar imported from China in 1994.

“When the coverage was extended on same terms and conditions, it would mean that the goods were covered till the same reached in any part of the country in India,” it stated.

The judges held that “while interpreting the policy the courts should keep in view the intention of the parties as well as the words used in the policy. If the intention of the parties subserves the expression used therein then the expression used in that context should be given its full and extended meaning.”

Source: PTI