ASSIGNMENT 01
Name: Muhammad Saeed
Student ID: 20201-28923
Course: Insurance Law in Pakistan
Faculty: Hamza Nizam Kazi
Data:
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Complainant (Insurer): The complainant obtained a Running Finance (RF) Loan of Rs.
3,000,000 from a bank and got a Fire Insurance Policy from M/s AAA Insurance Co. Ltd.
Ltd. to cover the stock of fabric in his business. The coverage covered loss or damage
brought on by fire, theft, riots, and atmospheric disturbance and riot strike damage.
Incident: On November 15, 2013, a mob set fire to a number of stores at Madina Market
during a religious procession, completely destroying the complainant's the goods. The
insurance company was swiftly alerted after filing a FIR.
Claim: The complainant claimed a Rs. 4,000,000 fire insurance claim, but the insurance
company (Respondent Co.) rejected it, claiming that the damage was caused by a
religious terrorism attack, which was not covered by the policy, and hence the claim was
not payable.
Argument: According to the complaint, the loss should have been covered under the
policy's "riot strike damage" clause since he thought it was a riot or strike that occurred
during a religious procession.
Surveyor's Report: The insurance company hired a surveyor, who determined that the
loss was caused by Religious Terrorism, which was not covered by the policy.
Legal Definitions:
According to the policy, an "act of terrorism" is any act that harms people or property
and is carried out for reasons related to politics, religion, or ideology.
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The policy covered loss caused by the act of any individual participating in a disturbance
of the public order that was not stated in particular terms.
Legal Analysis: Using Section 7 of the Anti-Terrorism incident, 1997 (ATA,97) in the FIR,
the insurance company rejected the claim principally on the basis that the damage was
brought on by a terrorist incident.
Decision:
The Decision should be in favor of the complainant in this case, and the insurance provider, M/s
AAA Insurance Co. Ltd., should to pay the fire insurance claim. The occurrence during the
religious procession should not be classified as an act of terrorism, it may be classified as an act
of terrorism if those mob would represent a religious party with aim to achieve political,
religious objective of arming property or people. The insurance company move to declare the
destruction of cloth stock as an act of terror by overlapping the definition of riot strike and
terrorism was just to get rid of the liability and also it was not mention in the insurance
agreement. Moreover, the insurance coverage made it plain that it covered the loss brought on
by riot strike damage. As a result, the insurance provider was wrong to reject the claim, and
they must now pay the complainant's fire insurance claim. According to the terms and
circumstances of the insurance policy, the insurance company is required to pay the complaint
the Rs. 4,000,000/- amount covered.