United India Insurance Co. Ltd. Vs Levis Strauss (India) Pvt. Ltd. (Supreme Court)
THE APEX COURT HELD THAT-In Case Of Specific Risks, such as those arising from loss due to fire etc. , the Insured Cannot profit and take advantage by double Insurance.
“Double Insurance”, is a scenario where an entity seeks to cover risks for the same or similar incidents through two different overlapping policies.
The Top Court made this observation while dealing with an appeal questioning an order of the National Consumer Disputes Redressal Commission, (NCDRC) which allowed the insurance claim of Levi Strauss (India) Pvt. Ltd. (“Levi”).
BRIEF FACTS:
1. United India issued Levi Strauss ( insured) a Standard Fire & Special Perils Policy (“SFSP Policy”), for January 1, 2007, to December 31, 2007. This policy covered Levi’s stocks while in storage for the sum of ₹ 30 crores. Levi obtained another SFSP Policy for the period of January 1, 2008, to December 31, 2008, on similar terms.
2. Levi’s parent company i.e., Levi Strauss & Co. obtained a global policy from Allianz Global Corporate & Specialty (“Allianz”) for the period of May 1, 2008, to April 30, 2009, covering stocks of all its subsidiaries, including Levi. The coverage through this stock throughout policy (“STP Policy”) was for $10 million in any one vessel or conveyance and $50 million in any one location.
3. The parent company also got another “all risks” policy (“AR Policy”) issued by Allianz for the same period covering the stocks of its subsidiaries throughout the world being commercial lines policy. The limit of liability of the AR Policy was up to $ 100 million.
4. During subsistence of all these policies, a fire broke out in one of the warehouses containing Levi’s stocks. Levi claimed ₹12.20 crores from United India.
5. Allianz appointed a Surveyor & Loss Assessor, Mr. K.P. Sen who submitted a status report provisionally assessing the loss at a higher figure of ₹14.30 crores.
6. United India appointed its professional surveyor, Professional Surveyors and Loss Adjusters Pvt. Ltd., who submitted the final Survey Report assessing the net loss at ₹11.34 crores.
7. United India’s report recommended that it was not liable for the claim in view of Condition No. 4 in the SFSP Policy owing to the policies issued by Allianz and it repudiated Levi’s claim.
