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Liability Insurance
Thursday, November 1, 2007
Needing clarity

Public road transporters should tighten up their indemnity clauses if they do not want to be held liable for injury to passengers.

This warning comes from Prè Prinsloo of Shepstone & Wylie Attorneys international transport and trade department. This follows a recent decision by the Supreme Court of Appeal, which ruled in favour of a tourist who was injured while on a ‘Drifters Adventure’ tour.
Tourist Mr Hircock claimed his injuries were as a result of the negligent driving of one of the Drifters Adventure Tours employees.
The Court had to interpret an indemnity clause that was drafted for the benefit of Drifters in order to protect it against liability for damages arising from its tour operations. In the legal action that followed, Drifters contended that it could not be sued for damages due to the fact that Hircock had completed an indemnity in its favour.
He explains that the Court re-affirmed the position in South African law that the courts will interpret indemnity provisions restrictively. “Furthermore, where an indemnity clause is capable of more than one meaning, an interpretation will be given to it that is least favourable to the party who drafted it (in this case, Drifters).”
The Court ultimately found that, on this basis, the indemnity did not exclude liability for damages arising from negligent driving on a public road and that Hircock could hold Drifters liable for his injuries.
“The importance of this decision lies in the fact that road transporters should ensure their trading conditions, particularly indemnity clauses, are absolutely clear and that each condition or indemnity is capable of one interpretation only.”

Copyright © Insurance Times and Investments® Vol:20.10 1st November, 2007
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