Exclusion clauses in insurance contracts

Produced in partnership with Susie Wakefield of Shoosmiths

Practice notes

Exclusion clauses in insurance contracts

Produced in partnership with Susie Wakefield of Shoosmiths

Practice notes

What are exclusion clauses

Unlike some exclusion or exemption clauses in ordinary contracts, an exclusion clause in a Contract of insurance is not usually designed to exclude, restrict or limit a party’s legal liability. Rather, these clauses carefully define the boundaries of the risk to be insured by setting out what will ‘not’ be covered under the contract of insurance. While insuring clauses are often broadly worded for simplicity, exclusion clauses are often used as a tool to narrow the scope of Coverage provided.

Exclusion clauses should be distinguished from other terms in the contract of insurance, such as Conditions precedent and warranties. The purpose of an exclusion clause is to define, from the outset, the specific risks which will not be covered by insurers in any event under the policy. Conditions precedent and warranties, on the other hand, will only affect the scope of cover when they are breached by the insured. Under the Insurance Act 2015, breach of a Condition precedent or a warranty may have the effect of discharging the insurer’s liability or

Susie Wakefield

Shoosmiths

Susie Wakefield is a partner in Commercial Litigation specialising in insurance and reinsurance litigation and arbitration. Susie also has a broad range of experience advising clients in the energy sector and in commodities trading.

Susie qualified and practised for many years in New York and Bermuda as well as in London. Susie has advised Bermuda, US, and London market insurers and reinsurers in litigation in federal and state courts in New York, the Supreme Court of Bermuda, and the High Court and in arbitration. She has represented clients in complex, multimillion-dollar disputes, including cases with substantive international and multijurisdictional aspects.

Recent experience includes:-

advising on a range of (re)insurance matters, including claims and coverage disputes and issues arising in connection with Bermuda Form policies and reinsurance arrangements involving captives and segregated account companies.

Advising insurers/reinsurers on complex policy wording reviews; significant property and casualty losses; claims involving allegations of fraud, misrepresentation, and nondisclosure; D&O issues; breach of warranty claims; claims for contribution from co-insurers; and insolvency-related matters.

Advising on numerous insurance and reinsurance (both facultative and treaty) coverage disputes in litigation and arbitration ' under the Arbitration Act 1996, the Federal Arbitration Act, the Bermuda International Conciliation and Arbitration Act 1993, and the UNCITRAL Model Law as well as ad hoc arbitrations and those under various institutional rules in the UK, Europe, and the US (notably ARIAS US). Susie co-authored the 'Lloyd's and London Market' chapter of volume seven of the New Appleman on insurance Law Library Edition, 2012.

Susie qualified in the UK in 1997 and is also admitted to practise in New York (2003) and Bermuda (2008).

Jurisdiction(s):

United Kingdom

Key definition:

Contract of insurance definition

What does Contract of insurance mean?

Under the Financial Services and Markets Act (FSMA) 2000, a contract of insurance is any contract of insurance which is a contract of long term insurance or a contract of general insurance.

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