In cases of insurance claims, if the insured has not been negligent in their actions, then it becomes important to ensure that the insurer adequately fulfils its duty towards the insured, the Supreme Court recently said.
The heart and soul of an insurance contract lie in the protection it accords to those who wish to be insured by it, it said.
The top court said so in an appeal filed against a decision of the National Consumer Disputes Redressal Commission. The case was regarding a fire that broke out at a warehouse in Mumbai.
The party, which suffered the loss, had purchased certain insurance policies from New India Assurance Co. to safeguard its custom-bonded goods in the warehouse and to cover the risk of fire.
Soon thereafter, a fire broke out in the insured warehouse. This led to a host of surveyors being appointed by the parties to assess the incurred losses and determine the cause of the fire.
A total of nine surveyors were appointed, of which three were by the insurance company and the rest by the state in due course of its investigation or by the party that suffered the loss.
While two of the surveyors appointed by the insurance company ruled that there was negligence on the part of the insured, the rest said that the fire broke out due to a short circuit in the wiring.
However, the NCDRC found logical inconsistencies in the two reports that alleged negligence on the part of the insured and ruled against the insurance company.
This prompted New India Assurance to file an appeal before the top court.
The apex court, too, ruled against the insurance company and said that the precise cause of a fire—whether attributed to a short-circuit or any alternative factor—remains immaterial if the insured is not the instigator of the fire.
The court said that the insurer assumes a fiduciary duty to act in good faith and honour their commitment, and that this responsibility becomes particularly pronounced when the insured, in their actions, has not been negligent.
In the realm of risk and uncertainty, individuals and organisations seek solace in the bastion of insurance—a covenant forged on the bedrock of trust.Supreme Court of India
In light of the vital role that trust plays in insurance contracts, it is important to ensure that the insurer adequately fulfils the duty that has been cast on it by virtue of such a covenant, the court said.
RECOMMENDED FOR YOU
![](https://images.assettype.com/bloombergquint/2023-01/4fb937d5-ba52-465a-9735-5c6f0e273dbc/Chanda_Kochhar___India_Economic_Summit_2011.jpg?rect=0%2C0%2C3500%2C1969&auto=format%2Ccompress&format=webp&w=75)
Videocon-ICICI Bank Loan Case: Supreme Court Issues Notice To Chanda Kochhar On CBI's Plea
![timelogo](/images/amp-time.png)
![](https://images.assettype.com/bloombergquint/2024-08-27/cijofge2/lajos-szabo-lzW4Zv95-Ts-unsplash.jpg?rect=0%2C0%2C3500%2C1969&auto=format%2Ccompress&format=webp&w=75)
JCB, Competition Concerns, And CCI's Power Of Investigation
![timelogo](/images/amp-time.png)
![](https://images.assettype.com/bloombergquint/2024-08-22/6o96v5fo/supreme_court.jpg?rect=0%2C0%2C3500%2C1969&auto=format%2Ccompress&format=webp&w=75)
Delhi Liquor Scam: Supreme Court Grants Conditional Bail To BRS Leader K Kavitha
![timelogo](/images/amp-time.png)
![](https://images.assettype.com/bloombergquint/2024-08-18/d0xbxoh1/photo-1589829545856-d10d557cf95f.avif?rect=0%2C0%2C3500%2C1969&auto=format%2Ccompress&format=webp&w=75)
Supreme Court To Hear Kolkata Doctor's Rape And Murder Case On Aug. 20
![timelogo](/images/amp-time.png)