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Jeweller loses appeal over insurance claim

PUTRAJAYA, 5 Jan 2009: Companies have to ensure that their security guards are physically armed while on duty as failure to do so will taint their chances for insurance claims for their valuables, the Court of Appeal here ruled today.

Court of Appeal judge Datuk James Foong, who sat with Datuk Abdul Hamid Embong and Datuk Abdul Malik Ishak, made the unanimous ruling when dismissing an appeal by Wilayah Beauty Gems Sdn Bhd for RM750,000 in insurance for jewellery lost in a robbery at its premises in 1994.

“We are of the view that armed guard in the insurance policy must mean that the guard was physically armed at the material time or if arms were made immediately available at the material time,” Foong in his oral decision.

The three judges were not in favour of the submission from V Jeisooria, counsel for Wilayah Beauty Gems, that the security guard need not physically carry a gun as long as the gun was immediately available to him in the premises.

On Nov 27, 1994, the shop was robbed by a group of armed robbers who fled with jewellery worth RM900,000. It filed a claim for insurance against Arab Malaysian Assurance Bhd as the insurer, but the latter refused to pay.  

It then filed a suit against Arab Malaysian Assurance at the Kuala Lumpur High Court in 1995 claiming that the insurance policy that it purchased covered the incident and argued that the clause on “armed guard” was unclear.

It contended that it was enough as long as the gun was at the guard’s disposal and that it did not matter whether the security personnel was in possession of the gun.

Arab Malaysian Assurance, however, submitted that there was a clause in the policy stating that there must be at least one armed guard on duty during business, therefore the security guard must be physically armed at all times, which he had failed to do so.

In this case, the security guard kept a loaded gun in a room inside the shop and came back to the entrance only to monitor customers going in and out of the shop, it said.

The claim was rejected by the High Court. Arab Malaysian Assurance was represented by counsel T Sagadevan. — Bernama

 

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