Case Title: Inder Jeet Singh Vs ICICI Lombard and another
Summary
The Jammu and Kashmir High Court has ruled that insurance agents, acting as intermediaries between clients and insurance companies, must provide conscientious and diligent assistance to clients during the process of completing insurance applications. The court ruled that the onus is on the insurance agent, not the insured party, to verify such numbers.
The court rejected the claimant-Inderjeet Singh’s contention that the claimant erroneously entered the chassis number and engine number on the proposal form, as the insurance policy listed Shagun Vaid as the insurance agent. The court also highlighted the importance of insurance agents as representatives of insurance companies and determined that they are liable for any potential errors or omissions. The court also ruled that once the ICICI Lombard included the correct engine number and chassis number in the insurance policy, the same shall be deemed to be included in the policy certificate of National Insurance Company. The court questioned why the insured party should be harmed by the insurance agent’s error in this instance and expressed dissatisfaction with the National Insurance Company’s lack of recognition and reasonable response to the claim. The court granted the appeal and ordered National Insurance Company to make a payment of Rs. 13,60,000, inclusive of interest, to the claimant.
About the case
A recent ruling by the Jammu and Kashmir High Court mandates that insurance agents, in their capacity as intermediaries between clients and insurance companies, must furnish conscientious and diligent aid to clients during the process of completing insurance applications. The proprietor of a hydraulic excavator was granted relief by a division bench of Justices Tashi Rabstan and Wasim Sadiq Nargal. The denial of the owner’s insurance claim was attributed to the incorrect chassis number entered in the insurance policy. The bench further established that the onus is on the insurance agent, not the insured party, to verify such numbers. “As representatives of the insurance company, insurance agents are required to assist clients in accurately completing insurance applications and to conduct themselves with due diligence and caution.” As a result, we reject with authority the learned counsel for National Insurance Company’s contention that claimant-Inderjeet Singh erroneously entered the chassis number and engine number on the proposal form, especially since the insurance policy of National Insurance Company lists Shagun Vaid as the insurance agent.
The bench emphasized the paramount importance of insurance agents in their capacity as representatives of insurance companies and determined that they are liable for any potential errors or omissions. They are liable for errors and omissions on behalf of the insurance companies they represent. The individuals tasked with the responsibility of adhering to legal and contractual obligations are the insurance agents. “An insurance agent must possess comprehensive knowledge of the process and meet the standard expectations,” the statement continued.
A petition appealing the decision of the J&K State Consumer Disputes Redressal Commission was pending before the court. As a result of the appellant’s excavator being involved in an accident, the Commission denied the complainant’s claim on the grounds that it lacked a valid policy for claiming indemnification. A rock that had fallen onto the excavator on January 28, 2009, precipitated the incident.
The respondent, National Insurance Company, maintained an insurance policy for the excavator from March 30, 2008, to March 29, 2009. Although the insured did not contest the damage or the policy being active at the time of the accident, the insurance company denied the claim on the grounds of inconsistencies in the chassis and engine numbers. In discontentment with this ruling, the claimant lodged a formal complaint with the Commission. The appeal followed the commission’s denial of the claimant’s position.
In the subsequent policy, the appellant contended that ICICI Lombard and the insurance agent of National Insurance Company both entered inaccurate chassis and engine numbers during the initial purchase. Conversely, the respondents contended that the Hydraulic Excavator that was damaged in the January 2009 accident does not correspond to the insured vehicle as defined in the policy issued in March 2008. The company deemed it appropriate to deny the claim on the grounds of this inconsistency.
The respondent Insurance Company has not denied the issuance of the Certificate of Insurance, the bench noted. Singh had reported the National Insurance Company’s dispute of the claim on the grounds of mismatched chassis and engine numbers to the Police Station and the Crime Branch, according to the document. Following this, in June 2009, ICICI Lombard issued an endorsement which rectified the chassis and engine numbers. The Crime Branch was duly informed of the endorsement. Considering this, the Court ruled, “Thus, once the ICICI Lombard included the correct engine number and chassis number in the insurance policy vide endorsement dated 04.06.2009, the same shall be deemed to be included in the policy certificate of National Insurance Company, because as per the own stand of National Insurance Company the policy-in-question was in continuation of the previous policy with the ICICI Lombard.”
The court further stated that ICICI Lombard had previously acknowledged, prior to the commission, its error in stating the incorrect chassis and engine numbers in the policy, attributing it to a typographical mistake. The National Insurance Company’s actions were subject to careful examination by the Court, which underscored the expectation of policyholders for protection and coverage. The court determined that it was unreasonable to expect the claimant to possess knowledge of the chassis and engine numbers, which are customarily the responsibility of insurance agents.
Considering the fact that the insured party is only required to recall the vehicle’s registration number and cannot be held liable for such technical details, the court questioned why he should be harmed by the insurance agent’s error in this instance. The court expressed dissatisfaction with the National Insurance Company’s lack of recognition and reasonable response to the claim, despite the liability having become apparent, and stated that it appeared the respondent Company was attempting to evade its obligation to indemnify the insured. In light of this, the court granted the appeal and ordered National Insurance Company to make a payment of Rs. 13,60,000, inclusive of interest, to the claimant.
