A contract of insurance has been described as an agreement where an insurer promises in return for a money consideration, the premium, to pay the other party, the insured, a sum of money or provide him with some corresponding benefit upon the occurrence of a specified event. See Prudential Insurance Company v Inland Revenue Commissioners [1904] 2 K.B 658, Gordon and Getz, The South African Law of Insurance, Third Edition @p 77.
In Zimbabwe, the Road Traffic Act (Chapter 13:11) provide for a statutory type of insurance called third party insurance. Section 22 of the Road Traffic Act makes it a requirement for users of motor vehicles and trailers to be insured against third parties. The requirements of this form of insurance are the same as those of the common law insurance contract except that the party claiming or on whose behalf a claim is brought, is not a party to the insurance contract, his claim being based on statutory requirements. A third party is able to sue an insurer directly on the basis of ss 22, 23 , and 25 of the Road Traffic Act. These sections provide for compulsory statutory insurance cover to third parties harmed by conduct of insured persons or an authorized driver of the insured person.
Section 23(2) provides that a statutory policy shall insure persons specified in the policy in respect of ‘any liability’ which may be incurred. In Johanne v Clarion Insurance Company and Ors HH 429 /12, the court considered the meaning of the phrase, “any liability” and concluded that the word “any” as used in s 23,
“simply means that the nature of the liability claimable in respect of a statutory policy is unlimited. To say that “any” means that the extent of the liability viz-a-viz the quantum, is unlimited, is to stretch the word to elasticity limit.”
Section 23 is couched in wide terms. The legislature intended that persons injured or suffering damages resulting from an accident were afforded wide protection and are left with a remedy. The phrase “any liability” speaks to the actual injury and nature of damages or injuries that may give rise to a claim. The mischief behind the use of that phrase was in order that all manner of injuries and damages in respect of death and bodily injury to, any person and the destruction of, or damage to, any property was covered. The use of the phrase “any liability” allows the court in the event of a dispute over what actual injuries or damage a policy covers, to always lean in favour of a third party. The phrase does not suggest that the amount claimable or arising from any injury to the claimant is unlimited. This is supported by the fact that the legislature put a cap on amounts claimable by prescribing the cover payable in those instances. The amounts payable are prescribed in the Act. See also Eagle Insurance Co Ltd v Grant 1989 (3) ZLR 278 at 280H to 281A. Both ss 23 (2) and 25 of the Act cover injuries and damages suffered as a result of an accident but limits the claim to amounts covered by the statutory policy.
Section 25 allows a third party to proceed directly against the insurer for any liability arising out of the accident and to recover amounts not exceeding the amount covered by the statutory policy. The section creates a form of vicarious liability on the part of the insurer. The section allows a third party to claim so much of his claim as exceeds the amount recoverable from the insurer from the insured. A person who sustains injuries and suffers damages in a road traffic accident may make a claim for a wide variety of damages but the amount claimable by him from the insurer is limited to amounts specified in the statutory policy. He may not claim all his monetary damages from the insurer but may claim so much of his claim as exceeds the amount recoverable from the insurer from the insured. Put simply, where a third party incurs damages which exceed the amounts specified in the Act, the third party is at large to recover the amounts from the insured person.
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