Two fundamental principles of insurance law
When it comes to insurance, even those who are naturally inclined to tell porkies are forced to tell the truth.
The first principle of insurance law is uberrimae fidei, which is interpreted to mean “the utmost good faith”. Essentially this means that both parties to an insurance contract must be upfront and completely truthful in their dealings with each other. The failure by either side to be truthful means that the insurance policy can be refused. If the insurer was not completely truthful about the contents of the policy on sale, for example, the insured will be entitled to a refund of premiums paid and perhaps damages; whereas if the insured is not completely truthful, the insurer can repudiate the policy and refuse to pay out compensation for the damage or loss to the thing that has been insured.
Unlike other commercial contracts, in Insurance contracts the seller is the insurer and it has no knowledge of the property or thing to be insured. The person seeking the insurance, “the insured”, on the other hand, knows or is supposed to know everything about the property or thing that they want to insure, and it is their legal duty to inform the insurer about these things. In many ways this is the reverse of ordinary commercial contracts because the ‘seller’ (the insurer) is entirely dependent upon the ‘buyer’ (the insured) to provide the information about the property or thing to be insured, hence the need for Utmost Good Faith on the part of the person seeking the insurance.
Utmost Good Faith can therefore be defined as a positive duty to voluntarily disclose, accurately and fully, all facts material to the risk being proposed, whether requested or not. In Insurance contracts Utmost Good Faith means that each party to the proposed contract is legally obliged to disclose to the other all information which can influence the other’s decision to enter the contract.
The second fundamental principle of insurance law is what is known as “insurable interest”. Put simply, I can only insure something if the loss of that thing will cause me loss. So for example, an employer can take out a life insurance policy on a ‘key employee’ because the death of that employee will cause the employer loss. On the other hand, I cannot take out a policy on my neighbour’s motor car as the loss of his car is not a loss to me.
The concept of insurable interest is the difference between insurance and gambling. If people were entitled to take out policies on anybody and anything, simply because it took their fancy, it would be the same as taking a punt on the favourite in the ninth race.
The dangers of Electromagnetic Field (EMF)
I have extensively covered the issue of the dangers of childhood leukaemia from the EMF transmitted by high power lines, and the shenanigans on the part of various people seeking to deny that truth (see https://the-law-is-my-oyster.com/2014/07/06/eirgrid-and-the-csa-and-that-2010-report/ and https://the-law-is-my-oyster.com/2014/07/29/eirgrid-and-information-to-the-public/). A number of EirGrid officials, despite their lack of medical qualifications, have been vehement in their assertions that overhead power lines are “completely safe” and that there is no link between EMF and childhood leukaemia.
As a result of a recent FOI request, the ESB has disclosed to the public the details of one of its insurance policies. Below is one of the pages of the disclosed document which sets out the confirmatory letter from the insurer regarding the nature and extent of the policy taken out by the ESB. EMF is expressly mentioned.
In other words, the ESB has recognised the dangers of EMF and has insured itself against any harm that might be caused to the public by the EMF emitted by their power lines. The fact that the insurer granted the policy means that it is satisfied that there is an insurable interest – in other words, that the ESB needs to be protected against liability for harm caused to people by the EMF off power lines.
Who to believe?
Here is yet another example of the ESB fundamentally disagreeing with EirGrid. EirGrid have denied that the EMF from power lines is harmful, whereas the ESB has insured itself against that very harm occurring.
When it comes to matters electric, who would you choose to believe? The ESB, who has been doing electricity for so long it probably installed the lighting on Noah’s Ark, or EirGrid, who was created (illegally, I would suggest) at the turn of this century?