Supreme Court to settle law on the issue of ‘Tsunami’ to include under insurance coverage or not

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New Delhi: Under ‘Perils of the Sea’ coverage of Insurance policy, now the Hon’ble Apex Court will decided whether the damages caused by tsunami comes or not.

The Bench comprising of Justices Madan B. Lokur and Adarsh Kumar Goel has admitted a plea filed by a Port Company and agreed to settle a law on issue of whether ‘tsunami’ was an insurable risk under the terms of Marine Hull Insurance Policy, after hearing the representative Advocates of Port Company Advocate, Shyam Divan and Lawyers, Vipin Nair and P. B. Suresh.

In the year 2004 when the Tamil Nadu Coast was hit by unprecedented tsunami in which one Krishnapatnam Port Company had lost its dredger. The damage or loss which will cause to the Dredger by ‘perils of the seas, rivers, lakes or other navigable waters’, were covered under the Insurance policy, however the policy not mentioned its coverage to the damage due to Earth-Quakes and Volcanic Eruptions. The Port company had claimed rupees 1.53 crore along with interest @ 18% per annum for loss caused to it. It has also claimed compensation of rupees 25 lakh for delaying to provide claim amount. However, on the claim of the K. Port Company, the United India Insurance Company had denied its liability.

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The case was brought before National Consumer Commission at Delhi wherein on 30th of January the Commission ruled that as the coverage of insurance policy could not be extended to the Quakes, it would also not extend to the tsunami induced by Quake.

The Port Company has its serious plea that the act of denying the policy coverage by the Insurance Company is a violation of legal principles which were laid down by the Higher Judiciary that the Insurance Policy to be construed strictly, especially an exclusion clause therein. Also it is pleaded that the Insurance company has unreasonably and illegally denied the claim of Port Company which has resulted to deficiency in service.

Port Company specifically challenged order of the National Consumer Commission pointing that the Insurance Company has excluded only Earth-Quakes and Volcanic Eruptions from the coverage of Insurance policy and it erred in including Tsunami in that list.

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By Faim Khalilkhan Pathan