Court rules for "collateral lie" gets mixed reaction
Industry warned fraud problem could grow after legal ruling.
The Supreme Court's ruling that insurers must still pay out on claims even when the claimant has lied has received a mixed reaction from industry leaders, with some arguing that this could push up the cost of insurance.
The ruling came after a dispute over damage to a Dutch cargo ship called DC Merwestone.
The Supreme Court held that the rule on fraudulent claims does not apply to a "collateral lie" which turns out when the true facts are revealed to have been immaterial to the assured's right
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