Q&As

Can an insurance company reclaim insurance payments previously paid under the policy under the principle of double recovery (through part-time salary and dividends) where there is no express term prohibiting double recovery in the insurance policy?

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Published on LexisPSL on 22/11/2021

The following Insurance & Reinsurance Q&A provides comprehensive and up to date legal information covering:

  • Can an insurance company reclaim insurance payments previously paid under the policy under the principle of double recovery (through part-time salary and dividends) where there is no express term prohibiting double recovery in the insurance policy?

Can an insurance company reclaim insurance payments previously paid under the policy under the principle of double recovery (through part-time salary and dividends) where there is no express term prohibiting double recovery in the insurance policy?

It is assumed that the relevant policy is a contract of indemnity, such as an income protection policy. It is also assumed, since the relevant payments were ‘part-time salary and dividends’ that they were paid by a third party rather than an insurer.

The key issue is likely to be whether the policyholder received payment from a third party in diminution of the loss for which it was indemnified by the insurer. This will depend on the purpose for which the salary and dividend payments were made

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