Dear (s)
Burglary Insurance is an Insurance which
incorporates proposal as the basis of the contract and states that the Company
provides coverage subject to the terms of the Policy as stated in the document.
Under various heads, it seeks to interpret the
terminology used in the Policy. In a
given case (cited as example) the facts portrayed are :
· Entry into the premises was by removing
two locks of the shutter – (whether by use of keys stolen earlier???). No force
on shutter / entry point.
· Inside the premises, the drawers had
been forcibly opened, cash box broken.
· Crime registered under Sec 379
(Punishment for theft) and 461 (dishonestly breaking open receptacle containing
property).
The question is whether this would
be construed as falling within the ambit of standard burglary Policy ? (special
reference to key clause ?). Loss ascertained
to be genuine otherwise. For analysis
let us see both the Policy wordings as also the probable intention behind the
construction of the Policies.
The key clause under Money insurance excludes
‘loss or money from safe or strong room following the use of key to the safe or
strong room or any duplicate thereof belonging to the insured, unless this had
been obtained by threat or violence’.
The Burglary Insurance provides indemnity for loss of cash ( not in
transit) from a strong room / safe, this is an exclusion meant to exclude
disappearance of cash (possibly with the
connivance of insured / employees or others who have access to cash).
Here the loss is under Burglary Insurance
Policy. This policy would cover subject matter(s) of value being items of
insured’s trade, money & securities (when specified).
The Policy provides indemnity in respect of
loss of or damage whilst within the insured premises as a direct result of
burglary which is clearly defined as : - an actual theft or an attempt thereat
a) accompanied by an actual forcible and violent entry into or exit from any
Building at the premises or b) following assault or violence to any person or
threat thereof.
Though there have been more than couple of
judgments by the
Apex Court : Insurance being a specific contract, the
agreeing terms between the contracting parties should prevail and the policy
would indemnify only losses arising out of burglary as defined above.
Whilst a general understanding and
liberal interpretation of the Burglary policy has been ‘loss of subject matter
with an element of force being applied for such removal i.e., goods not simply
missing without a trace, a literal interpretation of the wording would mean
that “”There has to be an actual theft or attempt accompanied by actual
forcible and violent entry into or exit from any building. Though it may sound
illogical, going by the construction, the use of force / violence needs to be
at the entry / exit of the building and breakage of property inside when not
accompanied would still be outside the purview.
On the query as to whether Burglary policies
have ‘key clause’ - the specific exclusion no. 4 is to be read. (the no. might
differ with Insurers) it reads : ‘loss or money and/or property abstracted from
any safe following the use of the key to the said safe or any duplicate thereof
belonging to the Insured, unless such key has been obtained by assault or
violence or any threat thereof’.
Here though loss of money or other
property is mentioned, the specific mention is of the key of the safe and not
those of the main building or premises.
There are general conditions and this one is
of relevance. It makes it a duty on the Insured to take all reasonable
precautions to prevent loss and damage and to keep all locks, bolts, protective
devices in full operation when premises are left unattended or closed. There is
another condition which imposes that all keys shall be removed from the
premises or placed within a locked safe or strong room.
Each case might throw up a
different verdict in Legal Forum depending upon the presentation of the facts
and circumstances.
First, the indulgence in any manner of the
Insured / family member / employee will have to be thoroughly ruled out,
especially when the keys have found their way to the assailant’s hands.
However, it appears that using the key clause
against the insured for defeating the claim might appear to be on a weak
wicket, provided there are enough indicators of violent removal of the goods
from the premises.
If one were to go by intentions, then coverage
should be against a burglary (not being mere theft i.e., use of force) then
this claim, subject to the foregoing should present itself as one which would
merit consideration.
In my view, the """ Policy
should deal with force & violent means being employed in taking away the
property and should not be merely related to breakage of premises / door.
""" A classic example
would be air conditioners being stolen from the building by forcible removal
but without entering the business premises, thus no forcible entry but force
used in removal of the subject matter insured. The key clause should be more of
excluding complicity of the insiders.
Views of an Insurer with the available
experience. There can be logically other views as well. Will benefit all
immensely, if the other perspectives are also shared by you……………………
With regards
S. Sampathkumar
