#insurance policy interpretation

The NCDRC has ruled that the sudden bursting of a molasses storage tank caused by internal operational pressure qualifies as a covered peril under Clause IX of a fire insurance policy, entitling the insured to indemnity even when the insurer claims wear and tear. This sets a critical precedent for industrial policyholders facing non-fire-related tank failures, clarifying that 'perils' extend beyond flames to sudden, unintended structural failures from operational stress.

Bombay HC reinforces that insurance coverage must align with the issued policy and the insured's reasonable expectations, invalidating post-contract unilateral amendments by insurers. The ruling affirms arbitral awards where insurers attempt to alter terms retroactively to deny claims, setting a precedent for contract interpretation in commercial disputes.

The West Bengal State Consumer Commission ruled that ambiguous insurance policy clauses using 'or' cannot be interpreted as 'whichever is earlier' unless explicitly stated. The surveyor's report holds binding evidentiary value unless rebutted, reinforcing the contra proferentem doctrine against insurers.