The recent decision in Chui Man Kwan v Bank of China Group Insurance Co Ltd demonstrates the effect of a non-contribution clause in an insurance contract.
The defendant insurer claimed a contribution from a third-party insurer in respect of a judgment entered against the defendant. Both parties had issued insurance policies which covered the liability of contractors against bodily injury or death caused to their employees during the course of employment on a construction project.
The plaintiff was injured in an accident which occurred during the course of his employment. His employer was insured under two employees’ compensation insurance policies, one issued by the defendant and the other by the third party.
Both policies incorporated the following clause:
“Other Insurance: If at the time a claim is made by the insured under this policy there is any other insurance covering the same liability, the company shall not be liable to pay or contribute more than its rateable proportion of any such claim and [the] costs and expenses in connection therewith.”
However, the policy issued by the third party also contained the following non-contribution clause:
“Notwithstanding claims settlement condition (D) of this policy, if at the time of any claim under this policy there is any other insurance indemnifying any person or [insured(s)] who are entitled to be indemnified under this policy, this policy is not to be called upon in contribution and, subject to the policy limits of indemnity, is... to pay any amount [only] if and so far as not recoverable under such other insurance.”
The court held that the effect of the non-contribution clause was that the third party’s insurance policy was to be called upon only to recover any amount which was not recoverable under any other policy.
As the insured party was entitled to full indemnity under the defendant’s insurance policy, the third party's policy was not triggered and the defendant’s application for a contribution from the third party was dismissed.
Pada intinya, Non contribution Condition menyatakan bahwa bila satu resiko ditutup oleh 2 polis, maka bila polis A mengandung kondisi tersebut, polis tersebut tidak akan berkontribusi dengan polis lain dalam Non contribution menyatakan bahwa bila satu resiko ditutup oleh 2 polis, maka bila polis A mengandung kondisi non-kontribusi tersebut, polis tersebut tidak akan berkontribusi dengan polis lain dalam penggantian klaim (dalam arti polis A tidak akan mengganti kerugian bila polis lain tidak mengandung kondisi yang sama). Bila polis lain juga mengandung kondisi yang sama, maka kedua polis sama-sama berkontribusi