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Legal issue
In a dispute over insurance of commercial vehicles, the Supreme Court treated the insured's employees as third parties to the insurance contract and their breach of trust as a harmful act covered by the applicable unified policy wording.
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Published principle
The Arabic judgment published by the Supreme Court is the primary source. The Russian, English and Chinese texts on this page are unofficial Smart Global Capital editorial accounts.
The official source contains the full judgment together with its published headnote and legal rule; the editorial account does not replace the Arabic original.
Insurance of property against loss or damage covers harm caused by a company's employees, even where it constitutes breach of trust, where the company contracted with the insurer for cover against loss or damage, because those employees are treated as third parties.
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Applicability
The Supreme Court quashed and remanded. The ruling does not create a general employee-fidelity guarantee or convert the policy into all-risks cover: the court stressed that the agreement defines the insured risk by subject, scope and cause, and a cause-defined risk is covered only when the agreed cause occurs. On these facts, breach of trust was treated as a “harmful act” under clause 1(e) of Chapter II of the unified motor-insurance policy, and the employees were third parties specifically in relation to the insurance contract.
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Related instruments
- Civil Transactions Law, Royal Decree No. 29/2013: relative effect of contract and general insurance rules
- Unified Motor Vehicle Insurance Policy issued by the Capital Market Authority, Chapter II, clause 1(e)
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