Banker's indemnity insurance policy
Jatin Agarwal
(Querist) 03 February 2010
This query is : Resolved
My query is that, A bank had took a Banker's indemnity insurance policy from a insurance company under which the cash and securities are insured and insurance company is liable to pay in case of any loss, but in the conditions of the insurance company it is clearly written that for this insurance policy the bank must keep an alarming system as well as additional security personals. Now if the bank it looted and thereafter it was found that there was no alarming system installed and also no security personals were present so my question is whether insurance company is liable to pay for the losses? If yes to what extent? and which are the laws that could dealt with.
Raj Kumar Makkad
(Expert) 03 February 2010
These are the terms which prevail. Contract is based upon trust and understanding in terms of conditions contained in written document signed by both parties. If bank had agreed to follow the necessary conditions and it violated those then insurance company cannot be held liable to compensate such deficient bank.
Swami Sadashiva Brahmendra Sar
(Expert) 03 February 2010
Mr. Makaad is right. Contract of insurance is a contract of utmost faith and trust. There should not be breach of any of the conditions of contract.
Jatin Agarwal
(Querist) 04 February 2010
Sir(s) this means the is no liability on this part of insurer ???? Not to any extend ..
J K Agrawal
(Expert) 04 February 2010
Dear sirs
contract of (only)life insurance is depending on utmost faith but other insurance contracts are governed by law of contracts.
In this case it would be looked into that if these conditions were essence of contract? If insurance company didnot checked proper security system before insurance of after insurance it kept mum having knowledge of such negligence it can not escape from its liability. However the ratio of liability may change as per facts of case.
