“Good Luck” Bank of Nova Scotia -v- Hellenic Mutual War Risks Association (Bermuda) Ltd.

Stephen Kenny QC
David Bailey QC

[1992] 1 AC 233; [1991] 2 WLR 1279; [1990] 2 WLR 547; [1990] 1 QB 818 [1991] 3 All ER 1; [1991] 2 Lloyd’s Rep. 191; [1989] 3 All ER 628

Stephen Kenny and David Bailey were involved in this the leading case on the effect of a breach of an insurance warranty. The insurer is discharged from liability automatically, from the moment of breach. Here the insurers were found liable to the bank, for failing (in breach of an undertaking) to inform the bank that cover had ceased, as soon as they were aware of the breach of warranty.

Insurance – Marine – Warranty – Effect of breach – Insurers undertaking to inform mortgagees on ceasing to insure – Insurers not telling mortgagees of assured’s breach of warranty before deciding to reject claim under policy – Whether breach of warranty discharging insurers from liability under policy – Whether insurers in breach of undertaking

Date added: May 16th, 1991

Area of Expertise

Insurance & reinsurance
Shipping, admiralty & transport