Insurance company cannot take defence which did not form the basis of repudiation of claim

Last updated: 07 November 2022

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The Supreme Court has ruled that an insurance company cannot introduce new defence arguments in court if they were not part of the original reason for repudiating a claim. In this case, the insurer initially rejected a marine cargo claim due to insufficient coverage balance. However, they later tried to argue that the policy type had changed, which the court deemed impermissible. The case was sent back to the State Commission to reconsider the claim solely based on the original grounds of repudiation.

Court :
Supreme Court of India

Brief :
The above decision of the Apex Court in various cases clearly point out the importance of drafting of Repudiation Letter by insurance companies. A Repudiation Letter is an important document in a suit of insurance claim. The wordings of Repudiation Letter should be clear and includes all possible ,valid grounds of repudiation. Since in later stages or in court of law an insurance company cannot take stand other than ,what is mentioned in the Repudiation Letter.

Citation :
CIVIL APPEAL NO. 7630 OF 2022

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Judgement posted by

FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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