Taxi Driver Online

Don't ever make the mistake of specifying that your vehicle only works a set number of hours in a day, rather than 24/7. Otherwise it could prove costly. Fortunately the court of appeal came to the rescue of this particular policy holder.

Suspension of cover as against voidability

Where the change in risk can be regarded as affecting one of the warranties descriptive of the risk, the result of the alteration will be that cover will be suspended so long as the warranty is not being complied with, but the policy will not become voidable. The best-known example is Farr v Motor Traders' Mutual Insurance Society, where the policyholder insured two taxis used in the course of his business. On the proposal form he stated that each was used for eight hours daily. In general this was true, but on one occasion when one of the vehicles was being repaired the other was used for both daily shifts. Later, when the normal pattern of use had been resumed, an accident occurred. The insurers refused to pay, relying on the breach of warranty, but the Court of Appeal decided the case in favour of the policyholder, holding that the warranty given simply defined the risk; while one taxi was being used for two shifts there was no cover, but once both taxis were back on the road the cover resumed. Where cover is suspended in this way, it is suggested that the duty to pay premiums is not suspended. It is not true in such a case that the policyholder receives nothing in return for these premiums. What he receives is the prospect of the revival of the policy once the warranty is again complied with.
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The case is here.

http://taxi-driver.co.uk/phpBB2/viewtop ... 0443#80443

Regards

JD