This article considers the purpose and interpretation of NICs in the context of the property damage claims to which they are most often relevant.
At their core, non-invalidation clauses (“NICs”) recognise an important commercial reality: an insured cannot control everything that happens at its premises.
In the event that an insured finds itself in breach of a condition or warranty owing to events that have increased the risk of damage to its property, but which were outside its authority, knowledge or beyond its control, a NIC may prevent the insurer from avoiding the claim. For that reason, they’re an important tool in an insured’s coverage arsenal.
Although there is relatively little caselaw on NICs, their purpose was recognised in The Seashell of Lisson Grove Ltd v Aviva Insurance Ltd [2011] EWHC 1761 (Comm) (on which we wrote a previous article – The Good, the Bad & the Ugly: #26 The Good: The Seashell of Lisson Grove Ltd v Aviva)
Reprinted courtesy of Abigail Smith, SDV Fenchurch and Kaarthiga Manimaran, SDV Fenchurch
Ms. Smith may be contacted at abigail.smith@sdvfenchurch.uk
Ms. Manimaran may be contacted at kaarthiga.manimaran@sdvfenchurch.uk