Clash of insurance law principles: Madison general insurance Company Limited and Another V. Konkola Copper Mines

Abstract

In everyday usage insurance does not appear as complicated as it actually is, and to the lay person it is no more than payment of premiums and making of claims when a loss occurs.However, there are a lot of complexities that are at play in insurance contracts especially in the application of the various principles of insurance law. This paper recognizes that a failure to understand the principles of insurance leads to a clash among some of the principles of insurance law. It has recognised from the case of Madison General Insurance Company Limited and Beaver Services Limited v. Konkola Copper Mines (Madison Insurance Claim) that the existence of a covenant to insure bestows immunity on a third party from insurer subrogation. The paper explains in brief insurance law, the nature of insurance contracts and the principles governing such contracts, it however, mainly focuses on three principles of insurance law; insurable interest, subrogation and non-disclosure. It explains each principle in detail and illustrates how clashes arise among these three principles and also analyses the decision in the Madison Insurance Claim. After such analysis, the findings of this paper are that the existence of a covenant to insure and the subsequent non-disclosure of its existence to the insurer give rise to the clash among the named principles of insurance. The research paper has in its conclusion recommended ways in which to avoid conflict in the application of insurance law principles. These involve a two-tier mechanism to avoiding insurer subrogation mirage, eliciting disclosure,recognition of the existence of tort immunity from subrogated claims and legislative action by the inclusion of insurance principles in the Insurance Act.