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Insurer Liable all the acts and omissions of its agents

In National Insurance Co. Ltd. vs Risheendran Nambiar, the insurer had rejected a claim because cheque towards the premium along with the proposal form was issued by a third party, who had no insurable interest in the proposed risk, the same was in violation of Section 64 VB of the Insurance Act and, hence, the proposal form was rejected.

However, NCDRC found that the agent of the insurer had delayed in depositing the form and the cheque. The said cheque with form was handed over to the agent on 10.04.2003, while it was deposited by the agent on 9.5.2003 and accident leading to the claim occurred on 11.5.2003, while the letter rejecting the proposal was issued by the insurer on 12.3.2003.

Therefore referring to Sub-Section (5) of Section 42 of the Insurance Act, NCDRC held the insurance company liable  for the act of omission or commission by its accredited Agent.

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