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Contract of Insurance to be construed strictly

The Supreme Court in M/s. INDUSTRIAL PROMOTION & INVESTMENT CORPORATION OF ORISSA LTD. VS. NEW INDIA ASSURANCE COMPANY LTD. & ANR. has reiterated that Contract of Insurance should be construed strictly and it is only when there is any ambiguity or doubt the clause in the Policy, it should be interpreted in favour of the insured.

In the instant case, the insurance policy provided cover against loss or damage by Burglary or House breaking i.e. (theft following an actual, forcible and violent entry of and/or exit from the premises). The Insurance Company rejected the claim of a company, stating that there is no forcible and violent entry. The insured company had preferred a complaint before MRTP commission, which rejected it. The company preferred appeal.

Article referred: http://www.livelaw.in/contract-insurance-construed-strictly-sc/

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