Judgment from the Court of Appeal on insurance settlement after a fire is set aside

After a fire in a production facility, the undertaking’s chair and general manager had deliberately given incorrect information to the insurance company about the age of several insured items, which could have led to compensation payments to which the company was not entitled. The Supreme Court stated that the condition for losing a claim against the insurance company under section 8-1 subsection 4 of the Insurance Contracts Act — that the insured "knows or must understand" that the incorrect information may lead to compensation being paid to which he is not entitled — is met when alleged ignorance appears incomprehensible from an objective assessment of the relevant concrete circumstances. The Court of Appeal had mistakenly considered this a question of evidence rather than a question of application of the law. The Court of Appeal's judgment was set aside. The ruling clarifies the interpretation of the expression "must understand" in section 8-1 subsection 4 of the Insurance Contracts Act.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Justices: Matheson, Bergsjø, Arntzen, Sæther, Hellerslia

Area of law: Forsikringsavtaleloven § 8-1 og § 4-11 tredje ledd

Key paragraphs: 39, 49-50