Insurance Law

Published date01 December 2005
AuthorLEE Kiat Seng LLB (Hons) (National University of Singapore); LLM (Maritime Law) (London); Advocate and Solicitor (Singapore); Adjunct Associate Professor, Faculty of Law, National University of Singapore.
Date01 December 2005

15.1 The reported cases for this year have been interesting because two noteworthy cases involved decisions on the right of contribution between insurers. While the first is certainly enlightening on the roles that the parol evidence rule and its exceptions play in determining the ambit of a policy during the process of determining if there is double insurance, which of course is a prerequisite to contribution, the second is important because it lays to rest a conflict of authorities on the point in time the obligation to make contribution is determined.

When is there double insurance?

15.2 China Insurance Co (Singapore) Pte Ltd v Liberty Insurance Pte Ltd [2005] 2 SLR 509 (‘China Insurance’) involved two workmen”s compensation policies taken out by BT Engineering Pte Ltd (‘BT’). The first was a workmen”s compensation — industrial risks policy from the defendant. The second, which was also second in time, was a workmen”s compensation policy from the plaintiff. Both covered BT and Keppel Shipyard (‘Keppel’) as the insureds thereunder.

15.3 An employee of BT was injured in an accident while carrying out works on board a vessel in Keppel. The injured employee commenced proceedings to claim damages against both BT and Keppel. The plaintiff did not dispute liability. It, however, sought a declaration that the defendant would be legally liable to contribute 50% of whatever sums it might be found liable to BT and Keppel for, by virtue of double insurance.

15.4 The crucial issue to be determined was whether or not there was indeed such double insurance. In order for there to be double insurance, the policies had to cover the same subject matter and risk.

15.5 The plaintiff relied on two facts to suggest that the policies did in fact cover the same subject matter and risk. Firstly, the defendant”s policy clearly stated, in its definition of the location of the insured to be covered

under the policy, that it covered ‘any other place in Singapore’; secondly, the defendant”s policy did not expressly exclude work on board vessels.

15.6 The defendant argued, on the other hand, that its policy did not cover work on vessels as, firstly, the policies which it issued to cover marine-related risks were denoted differently from that which was issued to the insured; secondly, its policy was an annual general workmen”s compensation policy whereas the plaintiff”s policy was for a limited period only and covered specifically the project on board the vessel; and, finally, the premium which it charged was only for general industrial risks and, hence, lower than what would have been charged if it was meant to cover marine-related risks as well.

15.7 The main issue around which the case revolved was the affidavit evidence which the defendant sought to introduce. These affidavits supported its argument that the insured had only sought to procure a policy from the defendant which did not extend to marine-related risks. Not surprisingly, the plaintiff sought to join issue on this and sought to exclude the affidavit evidence on the basis of s 94 of the Evidence Act (Cap 97, 1997 Rev Ed).

The decision in China Insurance

15.8 As pointed out by Andrew Phang Boon Leong JC (as he then was) in China Insurance, the principles behind double insurance are not controversial. The learned judicial commissioner referred to Tan Lee Meng, Insurance Law in Singapore (Butterworths Asia, 2nd Ed...

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