Insurance : Theft during transit : Insurer not liable where insured's employee left the insured property unattended
Insurance Company Not Liable for Theft During Transit, Says NCDRC. Jewellers Block Insurance Policy's Exclusion Clause and Due Diligence Condition Uphold Insurance Company's Appeal
In a significant ruling, the National Consumer Disputes Redressal Commission (NCDRC) has overturned the decision of the Gujarat State Consumer Disputes Redressal Commission, thereby absolving Oriental Insurance Co. Ltd. from liability concerning a theft claim made by Forever Precious Jewellery and Diamonds Limited. The case revolved around the theft of gold jewellery valued over Rs. 20 lakhs during its transit from Mumbai to Ahmedabad.
The dispute arose when Forever Precious Jewellery and Diamonds Ltd. lodged a claim with Oriental Insurance for theft under their Jewellers Block Insurance Policy. The jewellery was reportedly stolen from a bag left unattended by the employee of the insured company in a public bus. The insurance company had initially repudiated the claim, invoking "Exclusion Clause 5," which negates liability for theft if the insured property is stolen from a vehicle left unattended.
The State Commission had earlier ruled in favor of the jewellery company, ordering the insurance company to pay the claim amount along with interest and costs. However, the NCDRC, upon appeal by the insurance company, has reversed this decision.
The NCDRC, presided over by AVM J. Rajendra and Mr. Justice Anoop Kumar Mendiratta, emphasized the importance of "Condition 10" of the insurance policy, which mandates the insured to exercise due diligence to prevent any loss. The bench noted that the employee's failure to secure the insured property, leaving it unattended for 5-7 minutes, was a clear breach of the policy conditions. Furthermore, the Commission highlighted that "Exclusion Clause 5" was rightly invoked, as the bus was not under the control of the insured and was left unattended, thus exempting the insurance company from any liability.
Additionally, the NCDRC addressed the issue of territorial jurisdiction raised by the insurance company, affirming the State Commission's jurisdiction since the theft was discovered in Gujarat, where the complaint was registered.
In light of these findings, the NCDRC set aside the State Commission's order, ruling in favor of the insurance company and dismissing the complaint filed by the jewellery company. This ruling underscores the critical need for insured parties to adhere strictly to policy conditions and exercise due diligence in safeguarding insured properties.
Bottom Line:
Insurance claims arising from theft during transit - "Exclusion Clause 5" of the Jewellers Block Insurance Policy and "Condition 10" requiring due diligence by the insured are applicable. The insurer cannot be held liable where the insured's employee left the insured property unattended, failing to exercise due diligence to safeguard it.
