The Effect of "Indemnity" Clause in Underlying Contract on "Other Insurance Clause" and Contribution of Insurers in Compensating Losses and Damages (Case Study on Oil and Gas Industry All Risk Insurances)

Document Type : Research Paper

Author

department of Law,, Faculty of Law and Social Sciences, University of Tabriz,, Tabriz, Republic of IRAN.

Abstract

" Other insurance" clause frequently has been one of the controversy issues in insurance policies which relates to double insurance matters, but this clause clarifies to what amount insures should compensate losses and damages and refer to others. The property or liability under more than one coverage for the same risk which ate valid at the same time and same beneficiary shall not lead to which the assured benefit more than he has suffered. So, to share the amount of compensation between insurers is the matter here which determined by "other insurance" clause which each insurer to what amount should compensate and substantially is he liable for compensation or not?
Interactions between other insurance clauses according to types of this clause such as pro-rata, excess and escape sometimes make conflicts with no compatibility. In this case it worth analyzing the exact words of clauses and the intention of parties. Furthermore, interaction between other insurance clause and indemnity make some confusion to determine priority. In some cases, courts held indemnity precedes to other insurance regardless to its wording and in some others, courts held the loss and damage should be compensated due to other insurance clauses.

Keywords

References

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    Cases

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    1. Walters Constr. Inc. v. Gilman Paper Co. 620 So.2d 219 (Fla. App. Ct. 1993)

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    Wal-Mart Stores, Inc. v. RLI Ins. Co. 292 F.3d 583 (8th Cir. 2002),

    Family Insurance Corp. v. Lombard Canada Ltd. [2002] 2 S.C.R. 695, 2002 SCC 48.

     

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