Court ruling puts a stop to broker termination clauses
The Court of Appeal has upheld a High Court decision that it is not possible for a broker to enforce a termination clause if the insured goes out of business.
According to the Court of Appeal judgment in Towergate Stafford Knight Company (now Folgate London Market) v Chaucer Insurance any such clause would fall foul of the anti-deprivation principle and is therefore void.
The anti-deprivation principle is a common law rule that prevents parties from depriving their creditors of the benefits of their assets should they become insolvent.
Paul Cox, an insurance expert at Browne Jacobson who acted for Chaucer, commented: "This judgment demonstrates the
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