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The Appellant took out an insurance policy for one year on 15 October 2010 which insured against risk on all real and personal property, and against business interruptions and the loss of profit of the Appellant and all its group companies trading in Zambia. On 12 September 2011 a fire gutted a premises of the Appellant. At the time of the fire, the titleholders of the premises were Gulam Ahmed Adam Patel and Ayyub Adam Patel who traded under the name ‘Nyimba Filling Station and Supermarket’. The two were also shareholders in the Appellant Company.
The Appellant claimed on the policy for material damage. This claim was settled by the Respondent. The claim for business interruption and loss of profit was later rejected by the Respondent when it was discovered that the insured property was not registered in the name of the Appellant. The Respondent repudiated the policy for lack of insurable interest, refused to honour the claim for business interruption and loss of profit and sought to recover the money paid for the risk on real and personal property.
The Appellant took the matter to the High Court. The learned High Court judge held that the Appellant made a representation that it owned the insured property when it did not in fact do so and further that the Appellant's misrepresentation was fraudulent rendering the insurance void and the claim on the policy untenable. It is against this judgment that the Appellant appealed.
Insurable interest - determination of - insurable interest requirement does not necessarily require an insured to own the insured property outright -
Misrepresentation - materiality test - inducement test - material misrepresentation
Authority of English apex court