In a judgment (number 590/2017) dated 7th November 2017, the Spanish Supreme Court has had the opportunity to clarify conflicting case law from different Courts of Appeals regarding the requirements for the validity of insurance clauses that exclude coverage in cargo theft matters when there has been a failure to keep a proper supervision of the truck or container during transportation.
The Spanish Supreme Court admitted that there were two conflicting lines of interpretation. On the one hand, some Courts of Appeal considered that such clauses merely defined the scope of insurance coverage. Conversely, some Courts of Appeals considered that such clauses limited the rights of the assured under the policy and, therefore, for their validity it was necessary that they were highlighted in the policy and accepted in writing by the assured.
The Supreme Court considered both lines of interpretation and ruled that the clause at stake did not define the scope of the contract (i.e. risks covered, amount insured, period of coverage, etc.) but, on the contrary, limited and conditioned the rights of the assured when the risk covered occurred. Consequently, it was required that such clauses were highlighted in the policy and accepted in writing by the assured.
Given this finding, in mentioned judgment the Supreme Court held that the clause at stake was null and void as it had not been properly highlighted in the contract and signed by the assured, which confirmed that the insurance company had to make payment of the value of the cargo.