An insurance contract generally consists of several documents (e.g. general terms and conditions, special terms and conditions, any annexes, etc.). The special terms and conditions including annexes form a single package together with the general terms and conditions. The general terms and conditions are a collection of type clauses that an insurer applies in a particular branch of insurance. Standardised general terms and conditions are found in various insurance policies, including the All Construction Site Risk insurance policy. These conditions may also be legally regulated, as in the Minimum Conditions of motor vehicle liability insurance or the Civil Liability Private Life insurance.
The insurance contract (also known as an insurance policy) is a consensual contract and thus comes into being through the mere agreement of will between the parties. As such, the parties do not have to sign the insurance contract to speak of a valid contract.
So why does an insurance contract need to be signed? The presence of signatures on an insurance contract can play an important role in proving the existence and content of the insurance contract. Indeed, a signed insurance contract provides proof of it (Section 64 Insurance Act). This can play an important role when, for example, an insurer wants to raise certain clauses included in the general terms and conditions against the insured (e.g. clauses excluding insurance coverage).
That does not mean that the parties can only prove the existence and content of the insurance contract by a signed policy. Proof can also be provided by (i) an admission; (ii) the oath; or (iii) prima facie evidence in writing supplemented by witnesses or presumptions.
Thus, the insurer or the insured can prove the existence or content of the insurance contract even if there is no signed insurance policy. Typical examples of alternative means of proof are:
- the payment of the premium
- the delivery of statements of discharge
- the making of annexes
- the acceptance of a payment
In practice, we see that the policyholder and insurer usually only sign the special terms and conditions. The special conditions then in turn refer to a specific set of general terms and conditions (usually using a certain reference number). However, the general terms and conditions are rarely signed.
Does the signing of the special terms and conditions then count as proof of the general terms and conditions? The answer to that question is particularly important when the insurer wishes to limit its retention of cover (or intervention) on the basis of clauses included in the general terms and conditions (exclusion or loss of cover).
The insurer relying on general terms and conditions has to prove that these general terms and conditions form part of the contract between the parties. However, the mere reference at the conclusion of the contract to the existence of general terms and conditions and the reference number of these general terms and conditions will not be sufficient to prove the policyholder’s commitment to these general terms and conditions. It is up to the insurer to prove that the policyholder (i) was able to take note of the general terms and conditions; and (ii) accepted them. Mere signing of the special terms and conditions does not show that the policyholder was actually aware or able to take note of the general terms and conditions at the time the contract was concluded, let alone that he accepted them.
Insurers would therefore do well to pay sufficient attention to the policyholder’s perusal and acceptance of general terms and conditions. Indeed, there is a risk that they may not otherwise be able to rely on certain grounds of exclusion or loss of cover. The inclusion in the special terms and conditions of a mere reference to the reference number of general terms and conditions will often not suffice. Insurers (or, more generally, insurance distributors) are best to enclose the general terms and conditions when signing the special terms and conditions or explicitly inform the policyholder of the location of the general terms and conditions prior to contract conclusion.
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