Levitan, Sharon & Co

Tel Aviv

Levitan Sharon & Co. is a leading law firm specializing in General Litigation, with a specific emphasis on Insurance & Reinsurance Law.

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Statutory damages under Aviation Services Law cannot be claimed in class actions
Israel | 13 January 2021

In August 2020 the Central District Court dismissed several requests for the certification of class actions which had been filed against different airlines on the basis that statutory damages under the Aviation Services Law cannot be claimed in class actions. In all of the cases, the airlines' main argument was that according to the Class Action Law, the court cannot award compensation where proof of damage is not required.

Direct flight to final destination instead of delay in first segment not considered cancelled flight
Israel | 04 March 2020

The Tel Aviv District Court recently approved an appeal filed by Ukraine International Airlines and determined that the provision of alternative flight tickets resulting in a delay of less than eight hours following a delay in the first segment of a journey did not constitute the cancellation of a flight under the Aviation Services Law. The decision overturned a Small Claims Court decision and provides clarity on the meaning of a 'cancelled flight' under Israeli law.

Lightning damage to aircraft on incoming flights – Aviation Services Law special circumstances
Israel | 13 November 2019

In most cases, flights are operated by aircraft that arrive at an airport from a previous flight. As such, flights are sometimes delayed or cancelled due to a delay or cancellation of the previous flight. The Tel Aviv District Court recently denied a motion for leave to appeal filed by a passenger whose claim regarding the cancellation of his flight due to lightning damage to the aircraft which had occurred during the previous flight was denied by the Tel Aviv Small Claims Court.

What is considered a cancelled flight under the Aviation Services Law?
Israel | 14 August 2019

The Small Claims Court recently rejected two passengers' claim that their flight should be considered a cancelled flight under the Aviation Services Law. The case examined whether an airline should pay compensation for a missed connecting flight when passengers book two flights from the same company with a short connection time.

Courts underline passengers' duty to arrive at departure gate on time
Israel | 29 May 2019

Under the Aviation Services Law (Compensation and Assistance for Flight Cancellation or Change of Conditions), passengers who are denied boarding are entitled to compensation. However, in two recent district court judgments concerning passengers that were denied boarding, the courts found that passengers must arrive at the boarding gate on time. As this duty had not been fulfilled in either case, the airlines were not obliged to pay compensation.

When are technical malfunctions considered special circumstances?
Israel | 27 February 2019

The Beit Shean Small Claims Court recently declined a claim for compensation under the Aviation Services Law due to a delayed flight. The plaintiff had booked a return flight from Tel Aviv to Amsterdam with Arkia Airlines, which arrived in Amsterdam late after a nine-and-a-half-hour delay due to a technical fault. The court dismissed the claim and found that Arkia had proved that the technical malfunction had been caused by a fault in the aircraft's wing shelving, which had been beyond the airline's control.

Aviation Services Law does not apply to domestic flights outside Israel
Israel | 28 November 2018

The Tel Aviv Small Claims Court recently declined a passenger's claim for compensation against Qantas and Worldwide Travel and Tourism Ltd, concluding that as the flight in question was a domestic flight within New Zealand, Israeli law did not apply. The court stated that a 'flight operator' is defined in Clause 1 of the Aviation Services Law as an operator that operates flights to and from Israel. Therefore, the law does not apply when connecting flights to Israel are operated by a different airline.

Passenger's responsibility to arrive at departure gate on time
Israel | 25 July 2018

The Tel Aviv Magistrates Court recently declined a passenger's claim that Turkish Airlines should compensate him for being denied boarding. The court concluded that the plaintiff had failed to arrive at the departure gate on time and that he had known, or should have known, the final boarding time for passengers.

Duty to file complaint for baggage delay within period set by Montreal Convention
Israel | 28 February 2018

The Jerusalem Small Claims Court and the Netanya Small Claims Court both recently dismissed compensation claims for baggage delays, as the passengers did not comply with the Montreal Convention, according to which a complaint must be submitted within 21 days from the date of receipt of the baggage. However, the latter court ordered the airline to cover the plaintiffs' expenses, holding that the plaintiffs had clearly approached the court in good faith and that the airline's conduct had been inappropriate.

What is considered an 'accident' under Montreal Convention?
Israel | 13 December 2017

The Tel Aviv Magistrates Court recently declined a passenger's claim for bodily injury damages after it concluded that the event which was the subject matter of the claim was not considered to be an 'accident' as defined by the Montreal Convention. The plaintiff had filed a claim against El Al, arguing that he had been injured after eating a cake served to passengers.

Interpretation of cancelled flight under Aviation Services Law
Israel | 11 October 2017

The Rehovot Magistrate Court recently ruled that a flight that had departed on time, but been forced to return to the point of departure following a five-hour flight due to technical malfunctions, was a cancelled flight in accordance with the Aviation Services Law. Although there is no binding precedent, the courts have – in lower-instance decisions concerning the law – applied it in cases where the circumstances did not meet the literal interpretation of the law regarding cancelled flights.

Montreal Convention prevails over local law on limitation period
Israel | 09 August 2017

The Jerusalem Magistrates Court recently dismissed a claim for bodily injury caused to a passenger during a flight, as the claim had been filed more than two years after the plaintiff had reached his destination. The court referred to the Montreal Convention and the Carriage by Air Law, which provide that the right to a claim will be extinguished after a two-year period, despite the local Limitation Law providing a seven-year limitation period from the date of an admission of liability.

Skyfail: technical malfunction which delayed flight considered special circumstances
Israel | 17 May 2017

Since 2012 various lower court judgments have held that technical malfunctions which cause delays or cancellations to flights are not considered 'special circumstances' which exempt the carrier from paying the monetary compensation set by the Aviation Services Law. However, the Netanya Small Claims Court recently denied a claim and determined that a technical malfunction in an aircraft which caused a flight delay constituted special circumstances.

Montreal Convention does not apply to internal flight in Spain
Israel | 04 January 2017

The Petach Tikva Small Claims Court recently held that the Montreal Convention did not apply to an internal flight between two destinations in Spain, and that an Israeli court had jurisdiction to hear the claim. The court held that the convention does not apply in the case of an internal flight where the place of departure and destination are in the same country.

Compensation for flight downgrade under Aviation Services Law
Israel | 08 June 2016

The Tel Aviv Magistrate Court recently dismissed a claim based on the Aviation Services Law 2012 for compensation due to a downgrade in respect of a flight ticket purchased with flight points. The court addressed significant issues in its decision, including the right to compensation for passengers who did not pay for their flight ticket and whether full or partial compensation should be paid for a downgrade on only one flight segment.

Severe weather conditions constitute special circumstances under Aviation Services Law
Israel | 23 March 2016

The Tel Aviv Small Claims Court recently ruled that the cancellation of a flight due to severe weather conditions constituted special circumstances under the Aviation Services Law and rejected passenger claims against Delta Airlines. The law provides that passengers are ineligible for financial compensation if an operator can prove that a flight cancellation was due to special circumstances beyond its control.

Service of claim against foreign defendant through local representative
Israel | 23 December 2015

A recent district court decision approved a third-party notice filed against Cessna Aircraft Company (a US company) through Kamor Aviation Ltd, its representative in Israel. The decision concerned a claim filed against the Civil Aviation Authority, FN Aviation and others following a fatal accident involving a Cessna aircraft and whether Kamor was authorised to receive court documents on behalf of Cessna in Israel.

Exclusive claim under Montreal Convention and claims against third parties
Israel | 02 September 2015

The Tel Aviv Magistrates Court recently declined a motion to dismiss a claim (with prejudice) filed against the Israel Airport Authority for bodily injury caused to a plaintiff while disembarking an aircraft. The court analysed whether the exclusive claim provision set by the Montreal Convention prevented an injured party from filing a claim against other third parties.

Implementation of Warsaw Convention in case of bodily injury
Israel | 24 June 2015

The Tel Aviv Magistrate Court recently ordered Continental Airlines to compensate a passenger for bodily injuries sustained while on board one of its aircraft. The court held that the accident occurred due to an unexpected event external to the plaintiff, and therefore lifted the plaintiff's burden to prove that it was compensable damage as defined in Article 17 of the Warsaw Convention.

El Al ordered to indemnify passenger for injuries sustained during take-off
Israel | 22 April 2015

The Tel Aviv Magistrate Court recently handed down judgment in Arie Goldman v El Al Airlines and obliged El Al to indemnify the plaintiff for bodily injuries sustained during take-off. El Al denied liability based on Article 21 of the Warsaw Convention and argued that the plaintiff should bear total liability as he acted contrary to the airline's instructions.

Court rules that mental anguish is not recoverable under Montreal Convention
Israel | 14 January 2015

The Ramle Magistrates Court recently accepted part of a claim filed against El Al Israel Airlines for direct damages sustained as a result of the late arrival of baggage. However, the court rejected the plaintiffs' claim for mental anguish caused by the delay under the terms of the Montreal Convention.

Dispute over payment for excess baggage
Israel | 08 October 2014

The Magistrates Court of Kiryat Gat recently handed down a judgment in Svetlana Podvinski v EL AL Airlines. The court ordered EL AL to compensate a passenger who had refused to pay for 9 kilograms of overweight baggage and, as a result, remained in Belarus until she found an alternative flight one week later.

Limitation and extinguishment in court rulings
Israel | 11 June 2014

In recent judgments handed down by two small claims courts in Tel Aviv and Hakrayot, the courts accepted the defendants' argument that claims filed against them were time barred. In the second case the court stated that the two-year limitation period is absolute and cannot be changed based on the circumstances detailed in the General Limitation Law, as this may alter the limitation period for filing claims.

Is cancellation of domestic flight cause for mental anguish claim?
Israel | 26 February 2014

A petty claims court recently awarded a plaintiff compensation for mental anguish, even though no direct losses were proven. The court stated that on certain occasions it is appropriate to award damages for mental anguish to passengers – for example, when declining such compensation would lead to unjustified enrichment of the carrier or would frustrate the object of the law and the Montreal Convention.

Court finds technical malfunction not special circumstance for exemption
Israel | 20 November 2013

Since the law on the assistance and compensation given to passengers whose flights are delayed or cancelled came into force last year, the Israeli courts have dealt with a number of claims based on its provisions. In one such case, the judge examined the basis for the special circumstances under which an air carrier will be exempt from paying compensation to passengers following a flight delay.

Court declines Virgin Atlantic's forum non conveniens request
Israel | 24 July 2013

The Magistrates Court of Tel Aviv recently declined Virgin Atlantic's request to stay the proceedings against it and rejected its argument that the Israeli court was not the appropriate forum to hear a claim filed against it by Israeli citizens. Virgin Atlantic had argued that according to the 'majority of links' test, the claim should be heard in London; the plaintiffs instead argued that most of the ties connected the claim to the Israeli court.

Court finds negligence does not constitute cause of action
Israel | 22 May 2013

The Magistrates Court of Tel Aviv recently stated that negligence did not constitute a cause of action under the Warsaw Convention and the Carriage by Air Law. The court accepted the argument that the "occurrence which caused the damage" took place while the shipment was no longer under the control and supervision of the carrier. The case centred on failure to store a shipment under refrigeration while awaiting collection.

Court reconfirms payment for leasing counts as 'reward' under Warsaw Convention
Israel | 27 February 2013

The Tel Aviv District Court was recently requested to reconsider a case involving the application of the Warsaw Convention when interpreting the term 'for reward' in relation to the crash of a helicopter that had been leased. On hearing the additional evidence presented by the parties, the court concluded that the Warsaw Convention was indeed applicable to the flight and dismissed the claim as time barred.

Arbitration clause ignored by both parties deemed void
Israel | 28 November 2012

The Supreme Court recently ruled that although a general sales agent agreement may include an arbitration clause, when the parties ignore the clause and take actions that indicate their unwillingness to apply it, this stipulation will be considered void. A general expression of willingness to satisfy an arbitration clause is insufficient if a party's actions reveal otherwise.

Who is the carrier's agent? Court reverses first instance decision
Israel | 29 August 2012

The Tel Aviv District Court recently reversed a 2010 magistrates court decision in which it had been decided that Maman Cargo (an airport warehouse) was the carrier's agent, in a case relating to shipments stolen in transit. The district court decided that it was sufficient that Maman's services were compulsory for aircraft companies in order for the Warsaw Convention not to apply thereto.

Flight delay: Tel Aviv District Court rules on burden of proof
Israel | 20 June 2012

The Tel Aviv District Court, in an appeal, recently ordered Austrian Airlines to compensate plaintiffs following an unreasonable flight delay, which had been caused by damage to the pilot's cockpit window. The court concluded that the appellants had proved the delay and further ruled that the carrier had not proved its defence, as it had provided no proof relating to measures taken to trace the fault in advance.

Court rules on application of Warsaw Convention to gross negligence
Israel | 28 March 2012

In a recent case the Acre Magistrates Court considered whether, under the Warsaw Convention, an airline was liable for damage to a passenger's luggage during transit. After assessing the case the court applied Article 25 of the convention and determined that the claim under consideration was not subject to the limitation of indemnity provided for by Article 22 of the convention.

Court confirms that local law cannot exceed two-year limitation period
Israel | 09 November 2011

In a recent decision the Petah Tikva District Court considered the interpretation of Articles 29(1) and 29(2) of the Warsaw Convention in Israel. A subrogation claim had been filed by the National Insurance Institute against an aircraft carrier. The district court declined the motion and held that the two-year limitation period set by the convention is an absolute provision which may not be extended by the provisions of local law.

Court imposes full damages for carrier's liability for passenger's injury
Israel | 06 July 2011

In a recent judgment by the Tel Aviv Magistrates Court, the court accepted a bodily injury claim filed by a passenger who was injured when sliding down an evacuation slide that had been deployed after smoke was observed in the aircraft after landing. Despite the fact that the court had applied the Warsaw Convention to the flight, the compensation to the plaintiff was not limited according to the provisions of the convention.

Delayed flight - cause for compensation on grounds of mental anguish
Israel | 23 March 2011

The Rishon Le-Zion Magistrates' Court recently handed down judgment in a case involving eight claims filed by passengers as a result of a 17-hour delay in a flight from Israel to Turkey. Some of the passengers decided not to take the delayed flight and thus claimed for a full refund; other passengers took the delayed flight and claimed for damages (mainly for mental anguish) caused by the delay.

Who is the carrier's agent?
Israel | 22 December 2010

A recent court judgment analysed the applicability of the Warsaw Convention to a carrier's agent for shipments stolen in transit. The court ruled that limited liability (under the convention) applied to both the shipments' forwarder and the warehouse which stored the shipments at the airport. The forwarder's employee was convicted of theft and must face full liability. The case has been appealed.

Court finds Airport Authority responsible for physical injury caused at airport
Israel | 14 July 2010

In a recent case the Kiryat Gat Magistrates Court ruled on a physical injury claim filed against the Airport Authority. The plantiff was injured by a fellow passenger when waiting to pick up her luggage in the baggage reclaim hall at the airport. The court ruled that the authority, as owner of the airport, should have taken steps to prevent physical harm to passengers.

Applicability of Montreal Convention to international and domestic carriage
Israel | 07 July 2010

A significant new amendment was recently made to the Carriage by Air Law 1980. Previously, the law applied the Warsaw Convention 1929 (as well as the Hague Protocol 1955) to international and domestic air carriage. The law has now been amended to apply the Montreal Convention to international and domestic carriage. This amendment will come into force subject to an official notice from the Ministry of Foreign Affairs.

Is the Warsaw Convention's two-year limitation period subject to extension?
Israel | 24 March 2010

In 2001 a Siberia Airlines plane was hit by a Ukrainian Army rocket and crashed over the Black Sea. In 2008 the Tel Aviv District Court dealt with the issue of whether the two-year limitation period provided under the Warsaw Convention may be extended based on the Israeli Law of Limitation 1958. The court ruled that under unique circumstances it is possible to extend the convention's short prescription period.

Does payment for leasing count as 'reward' under the Warsaw Convention?
Israel | 16 December 2009

In a recent judgment the Tel Aviv District Court interpreted the term 'for reward' when applying the Warsaw Convention to the crash of a helicopter which had been leased. The court dismissed the claim against the aircraft operator and its insurers due to the fact that the two-year limitation period had elapsed before the claim was filed.

Agency Relationships between Carriers and Travel Agencies
Israel | 28 October 2009

In a recent case the plaintiff had purchased tickets through a travel agency to fly with EL AL Israel Airlines. The price had been calculated in Israeli shekels according to the 'cash rate', rather than the lower 'transfers and cheques rate'. The plaintiff alleged that there was an agency and trust relationship between the travel agency and the carrier, and that thus the travel agency's actions should be attributed to EL AL.

Extra-contractual Exposure Due to Wrongful Denial
Israel | 08 July 2009

In a recent case involving an aircraft crash the Haifa District Court ruled that the insurer, which failed to pay insurance benefits on time, may be obliged to compensate the insured for the damage suffered as a result of the delay. The ruling necessitates a review of declination procedures and requires insurers to consider, before declining coverage, whether the declination is well founded.

Court Considers Applicability of Warsaw Convention to Freight Forwarders
Israel | 15 April 2009

The liability of an air carrier is provided for under the Warsaw Convention, as enacted into Israeli law. However, is the liability of a freight forwarder also governed by the Warsaw Convention? In a recent decision the Tel Aviv Magistrates' Court referred to the applicability of the two-year limitation period under the Warsaw Convention to a claim against a freight forwarder which had not issued an airway bill.

Multinational Accidents - Which Law Should Apply?
Israel | 04 March 2009

Air accidents inevitably raise a number of complex issues, including the issue of jurisdiction. Where the Warsaw Convention applies, a framework for jurisdiction is specified; however, where it does not apply, jurisdictional issues may become more problematic. This issue has been addressed by Israeli courts in several aviation claims arising from accidents that have occurred in non-commercial circumstances.

What Constitutes ‘Wilful Misconduct’?
Israel | 19 November 2008

In order to plead wilful misconduct as stated in Section 25 of the Warsaw Convention, a plaintiff must prove that the degree of negligence was high and the carrier was aware that its behaviour may cause damage, yet was indifferent to this result. This update looks at three recent cases in which airlines were accused of wilful misconduct.

Environment & Climate Change

Class action for bodily injury due to environmental pollution
Israel | 26 April 2021

A non-profit organisation filed a claim and a motion to certify the claim as a class action against 30 plants in the Haifa Bay region, arguing that the plants polluted the environment and caused bodily injuries to the class members who were exposed to the hazardous materials which the plants emitted. The respondents held that it was impossible to handle a claim for bodily injuries caused by environmental pollution in a class action procedure. A court has declined the respondents' motion to strike out the claim.


Fire did not break out as a result of a gas explosion: dismissal of claim against gas supplier and insurer
Israel | 09 March 2021

The Central District Court recently dismissed a claim filed by a plaintiff against a gas supplier and its insurer and determined that the plaintiff had failed to prove that the claim event had been a gas explosion and the gas supplier's alleged negligence. The court accepted all of the arguments raised in the written summaries filed on behalf of the defendants and determined that, among other things, the plaintiff did not own the business where the alleged event had occurred so was not entitled to compensation.

Impact of new controversial Civil Procedure Regulations on insurers: faster, stronger, costlier?
Israel | 02 February 2021

The new controversial Civil Procedure Regulations recently entered into force. Insurers' claims departments must study and understand these new procedures, which may cause increased uncertainty during the first years of implementation. In the meantime, plaintiffs – including insurers in subrogation claims or claims for contribution – must prepare their claims more thoroughly with all supporting documents and opinions.

Supreme Court rules that electric bicycles are not motor vehicles
Israel | 15 December 2020

The controversy over whether electric bicycles are motor vehicles and are hence subject to the Law of Compensation to Victims of Road Accidents recently came to an end with a Supreme Court ruling. Since electric bicycles are involved in many accidents, the question of whether the law applies has become important because if electric bicycles were to be considered motor vehicles, there would be a duty of insurance.

Lack of safety measures does not repudiate coverage as long as insurer has collected premium
Israel | 20 October 2020

A recent case dealt with the question of whether an insured is entitled to insurance benefits for the loss of their car by theft when it lacked the security measures required by the insurer. The Insurance Contract Law enables the award of partial benefits (Article 18), but in this case the insurer presented no evidence to support the application of this remedy. Thus, the court ordered the insurer to pay the full claim.

Supreme Court rules on 3% capitalisation interest for subrogation claims filed by NII
Israel | 06 October 2020

The Supreme Court recently answered a crucial question which could affect the reserves for bodily injury claims of all Israeli insurers and hence affect their balance sheets. According to the decision, the relevant annual capitalisation interest that should apply in respect of subrogation claims filed by the National Insurance Institute (NII) is 3% regardless of the fact that the NII paid allowances to the injured based on an annual capitalisation interest of 2%.

Foreign insurers' right of subrogation – time for revision?
Israel | 11 August 2020

In November 2017 the Supreme Court approved a district court's decision that a foreign insurer which is not licensed under the Supervision Law is not entitled to file a subrogation claim in Israel. Notably, the Supreme Court is expected to readdress this decision in the near future. In view of its problematic outcome, it is hoped that the court will take this opportunity to reconsider its position and set a new and fairer precedent.

Insurance class actions due to COVID-19 pandemic
Israel | 30 June 2020

Has the COVID-19 pandemic led to the filing of insurance class actions which are typical of such crises? This article discusses class actions relating to motor, business and apartment insurance based on the allegation that the insureds paid monies (eg, premiums) for a period during which they did not enjoy any or full consideration for these payments.

Precedential judgment: innocent insured doctrine applies in specific circumstances
Israel | 21 April 2020

In a recent and precedential Supreme Court judgment, the court dealt with the application of the 'innocent insured doctrine' and determined that the doctrine applies in Israel. Hence, where an insurer is entitled to be discharged of liability towards an insured, in some cases, the exemption may not apply vis-à-vis other co-insureds. In this case, the doctrine did not limit the discharge of the insurer.

COVID-19 and insurance litigation: current and expected trends
Israel | 14 April 2020

The outbreak and spread of COVID-19 in Israel is affecting businesses and the movement of individuals, as well as significant reductions in commercial activity. This article examines how COVID-19 will affect insurance litigation and what can be expected in the long term.

Declination letter, statement of defence and what lies in-between
Israel | 18 February 2020

In a recent decision, the Supreme Court clarified the boundary between maintaining the commissioner of insurance's directive requiring the full grounds and reasons for dismissing a claim to be included in a letter of declination and insurers' right to provide additional details in their statement of defence. The court accepted the insurer's position that it is acceptable to elaborate on declination arguments raised in a letter of declination.

Subrogation claims by foreign insurers: contradictory district court decisions
Israel | 11 February 2020

The Haifa District Court and the Tel Aviv District Court recently issued conflicting decisions on the question of whether foreign insurers can file subrogation claims through their insured after paying the insured insurance benefits. In each case, the alleged tortfeasor requested that the court strike out the foreign insurer's claim, arguing that the latter had no right to file the claim in Israel as it was a non-admitted insurer.

Court redefines relationship between insureds, tortfeasors and National Insurance Institute
Israel | 15 October 2019

Employees in Israel are automatically insured for work accidents by the National Insurance Institute (NII). Until recently, if an insured filed a claim against a third party and the claim was settled, such a settlement was perceived as an admission of liability with regard to the NII's subrogation. A recent Tel Aviv District Court judgment has changed this perception.

Insurance, diamonds and fraud: court declines insured's appeal regarding fraudulent jewellers block claim
Israel | 27 August 2019

The Supreme Court recently declined an appeal filed by an insured and several companies controlled by him against the insurers Allianz Versicherungs, Menorah Mivtachim Insurance Company and HDI-Gerling Industrie Versicherungs. The insurers had argued and proved in the district court that the claim was fraudulent. The Supreme Court stated in the appeal that the factual basis determined by the district court was sufficient to conclude that the insured event had not occurred.

Insurer liable for extra-contractual damage
Israel | 23 July 2019

The Rishon LeZion Magistrate's Court recently addressed the extent to which insurers are responsible to their policyholders and whether this responsibility is limited to matters included in a policy. The case concerned a claim filed by an insured against an insurer for damages caused as a direct result of a water leak. The court ruled that the insurer had acted negligently as its representative had misled the policyholder regarding the insurance coverage offered.

No-fault system and compensation for road accidents
Israel | 21 May 2019

Israel has a no-fault system for road accident compensation under the Road Accident Victims Compensation Law. According to the law, drivers must have a valid insurance policy that covers all bodily injuries. This mandatory insurance system ensures that drivers, passengers and any third parties receive compensation when injured in a road accident. Further, it provides compensation to pedestrians who have been hit and injured by an insured motor vehicle.

Court has jurisdiction over recovery claim filed by Israeli insurer against foreign reinsurer
Israel | 26 March 2019

The Tel Aviv District Court recently acknowledged jurisdiction over a claim filed by an Israeli insurer against a foreign reinsurer that had refused to participate in a settlement agreed by all of the other reinsurers. The court noted that there was no dispute that the reinsurers' agreement included an exclusive jurisdiction clause referring to the Israeli courts and ordered a statement of claim to be served on the reinsurer.

Sporting event organisers should reconsider scope of coverage
Israel | 26 February 2019

Insureds purchase insurance coverage for their potential liability according to the level of their exposure towards third parties. In a recent judgment, the organisers of a cycling competition were found liable towards a cyclist who had been injured during a competition, and their insurance coverage was well below the damages that the court imposed. Following this judgment, sporting event organisers should reconsider the scope of their insurance coverage.

Are insurers exempt from liability towards third parties where insured driver was drunk?
Israel | 18 December 2018

The Supreme Court recently dismissed the appeal of an insurer, declining its allegation that it should be exempt from liability towards a third party as the insured had driven under the influence of alcohol. The court determined that the standard motor vehicle insurance policy is aimed at protecting the insured. Further, an insurer's liability should not be narrowed and damage caused by a driver who drives under the influence of alcohol should not be excluded from coverage.

Denial of liquidator claim based on 20-year-old claims-made policy
Israel | 09 October 2018

The Jerusalem District Court recently dismissed a liquidator claim against an insurer based on a claims-made policy that had been issued 20 years previously and expired four years later. The court stated that it could not accept a claim filed 16 years after a company had stopped paying its claims-made insurance premiums as doing so could create a situation in which a policy never ends, which would be unreasonable.

How does insured's fraudulent claim affect third-party insurance rights?
Israel | 21 August 2018

The Supreme Court recently examined whether Article 25 of the Insurance Contract Law, which discharges an insurer of liability where an insured or beneficiary submits a fraudulent claim, also applies to third-party claims made in good faith. The court's decision clarifies that fraud by an insured will also affect bona fide third-party claims and that the total discharge of an insurer does not require a causal connection between the fraud and the insurer's liability to be proven.

Importance of providing insurance policies to insureds
Israel | 19 June 2018

An insured recently filed a claim against its insurer with the Jerusalem Magistrate Court, which dismissed the claim based on policy exclusions. The insured then appealed to the district court, which found that the insured was entitled to insurance benefits as there was no proof that it had received a copy of the policy and been aware of the exclusions. The insurer requested leave to appeal to the Supreme Court, which dismissed the appeal and ordered the insurer to bear the insured's expenses.

Withdrawal of class action due to lack of individual cause of action
Israel | 24 April 2018

The plaintiff in a recent case filed a claim and a motion to certify the claim as a class action against the insurer. The insurer paid the plaintiff only 85% of the actual damage and notified her that following the examination of the parties' versions and the damaged parts of the cars involved, it had deducted the plaintiff's contributory negligence at a rate of 15%. The insurer argued, among other things, that the plaintiff had no individual cause of action.

Is insured obliged to pay deductible despite objection to settlement?
Israel | 03 April 2018

A recent Haifa Magistrate's Court decision concerned Hachshara Insurance Company's claim that its insured must pay the deductible despite objecting to the settlement agreement signed between the insurer and a third party. The insured had claimed that she was not required to pay the deductible as the insurer had reached the settlement without informing her and she had objected to it. The court rejected both claims and ordered the insured to pay the deductible plus legal fees.

Ministry of Finance eases requirements to obtain insurer's licence in Israel
Israel | 20 February 2018

With the aim of increasing competition in the insurance market, the parliamentary finance committee recently approved a proposed Ministry of Finance regulation that will reduce the minimum capital required for a new insurance company, thus enabling new players to enter this confined market. The change in equity requirements is notable and increases the opportunity for new investors to consider establishing insurance activities in Israel.

Is groundwater flooding a foreseen event in a construction policy?
Israel | 23 January 2018

In a recent Supreme Court case, the insurer argued that it had been known that groundwater existed at a construction site before work commenced. Any damage caused as a result of groundwater was therefore foreseeable and not covered. The insured denied this and claimed that the insurance policy included no exclusion for groundwater damage. The court examined the contract's language to search for the contract's purpose based on the parties' intention before the insurance event.

Insured's disclosure duty versus insurer's obligation to conduct independent investigations
Israel | 19 December 2017

A recent Tel Aviv Economic District Court case examined the issue of an insured's disclosure duty versus an insurer's obligation to conduct independent investigations. The court determined that an insured has a broad disclosure obligation during the underwriting of a policy, and that an insurance contract is subject to duties of good faith and fairness. Therefore, an insurer is entitled to rely on the information provided to it by an insured and is not obliged to conduct additional independent investigations.

Court declines jewellers' block claim, accepting argument of fraud
Israel | 24 October 2017

The Central District Court recently declined a jewellers' block policy claim after the insurers proved that the claim had been filed with fraudulent intent. The case concerned an Israeli diamonteer who claimed that $10 million worth of diamonds had been stolen from him under the threat of violence. However, following an investigation by the insurers, it was revealed that a number of the stolen diamonds were still in the claimant's possession after the alleged robbery.

Third-party liability or professional indemnity – which policy should apply?
Israel | 18 July 2017

There is a fine line between whether the act or omission of a tortfeasor is covered by a professional indemnity or public liability policy. To complicate the situation in Israel, professional indemnity policies are issued on a claims-made basis and public liability policies on an occurrence basis. The Tel Aviv Magistrates Court recently addressed these matters.

Failure to implement risk mitigation measures results in dismissal of insurance clause
Israel | 30 May 2017

Before the Insurance Contract Law 1981 was enacted, failure to take protective measures could lead to a complete loss of benefits. However, following its entry into force, most court rulings have applied Article 21 of the law, which provides that if the insured fails to take risk mitigation measures as stipulated in the insurance contract, the insurer may be entitled to reduce the insured's benefits or even be discharged from liability.

Draft directive will ensure quick and fair settlement of long-term care insurance claims
Israel | 09 May 2017

The minister of finance and the commissioner of capital markets, insurance and long-term savings recently published a draft directive designed to ensure better treatment of insureds with long-term care insurance policies. The directive intends to shorten and simplify the claims process and increase insurers' objectivity when evaluating an insured's medical situation.

Are adult children considered dependants under Road Victims Compensation Law?
Israel | 28 March 2017

In a recent decision, the District Court examined the Road Victims Compensation Law's scope with regard to a deceased's adult children. The court ruled that even though the Road Victims Compensation Law does not define a 'dependant' as a minor, adult children are generally not considered to be dependants. The court will consider adult children as dependants only in rare circumstances based on evidence proving actual dependence and a lack of financial independence.

Supreme Court examines whether non-admitted insurer can file subrogation in its own name
Israel | 21 February 2017

The Supreme Court recently tackled the question of whether a non-admitted insurer is entitled to file a subrogation claim in Israel in its own name. The court upheld the Central District Court judgment which approved a motion to strike out a subrogation claim. The judgment creates a distinction between the procedure by which an admitted or non-admitted insurer can file a claim against a party responsible for loss or damage.

Claims-made policy: is it necessary to notify an insurer about a potential claim?
Israel | 14 February 2017

The Tel Aviv District Court recently determined that a professional liability insurance policy on a 'claims-made' basis does not apply to claims filed against the insured after expiration of the policy for circumstances which were known to the insured during the policy's set timeframe, but were not notified to the insurer.

Who is the beneficiary in a personal accident insurance policy?
Israel | 17 January 2017

A plaintiff recently filed a statement of claim with the Court of Family Affairs arguing that she was entitled to receive one-quarter of the insurance benefits which were paid, following her father's death, to his wife, who was not her mother. Since the policy wording was ambiguous regarding the identity of the beneficiary in case of death, the court was required to address the interpretation of the definition of 'beneficiaries' in the policy.

Does non-disclosure discharge insurers from liability?
Israel | 29 November 2016

In a recent case, the plaintiff did not disclose previous insurance claims when asked to do so during a pre-contract phone call. However, the court rejected an allegation of fraudulent intent against the plaintiff and did not award the remedy available to the insurer of reducing insurance benefits in proportion to the additional premium which would have been charged had the full facts been known, as the need for an additional premium was not proven.

Supreme Court decides on coverage afforded under D&O insurance policy
Israel | 01 November 2016

In a recent case concerning coverage offered by a directors' and officers' liability insurance policy, the Supreme Court ruled that, in some instances, several insureds can be insured under one policy. The court found that it is clear in such a case that an insured who acts maliciously will lose his or her right to policy coverage. However, the case raised the question of what happens to the other innocent insureds.

Court declines motion to adjoin insurer to class action
Israel | 30 August 2016

The Central District Court recently declined an insured's motion to file a third-party notice against its insurer in the framework of a class action. The case concerned a claim filed against several electrical appliance traders and importers. In its decision, the court highlighted that leave to file a third-party notice in a class action will be granted only if the defendant presents a proper basis for the liability of the third party.

Court rules insured must pay deductible for legal expenses even if claim against it fails
Israel | 26 July 2016

In a recent Haifa Magistrates Court case the question arose as to whether an insured party must pay the deductible in accordance with an insurance policy if the claim filed against it is declined. In accordance with the policy, the court held that the insured was obliged to bear the deductible even if the amount paid by the insurer related solely to defence costs, and that this was the same whether the claim was accepted or declined.

Status of policy confirmation
Israel | 10 May 2016

The Israeli non-life insurance market uses an additional document to an insurance policy called an insurance policy confirmation, which is issued at the request of the insured and is usually requested by third parties that enter into a commercial contract with the insured. The Supreme Court recently determined that an insurance policy confirmation should be examined as part of the policy that extends the coverage afforded by a separate document.

Limitation period in insurance claims
Israel | 12 April 2016

A recent magistrate's court decision rejecting a claim filed after the limitation period prescribed by the Insurance Contract Law had expired raises an important issue relating to the liability of insurers to pay insurance in such circumstances. The plaintiff argued that the grounds for filing the claim were not based solely on the Insurance Contract Law, but also on breach of the Tort Law, contractual grounds and unjust enrichment.

Is detonation of explosive device attached to vehicle an accident?
Israel | 01 March 2016

In a recent case concerning damage sustained following the detonation of an explosive device attached to a vehicle, the Supreme Court had to decide whether this event should be regarded as a road accident. As the device was detonated by remote control, the court decided that there was no connection between the damage sustained and the vehicle's use for transportation as required by the Road Accident Victims Compensation Law.

Lawyer's conflict of interest not covered under professional liability insurance
Israel | 22 December 2015

Lawyers in Israel are not bound by law to purchase a professional indemnity policy, but most do. The question arises of whether certain behaviour amounts to negligence (which is covered by a professional indemnity policy) or whether it amounts to a breach of trust (which is not). The Tel Aviv District Court recently decided that a lawyer who favoured his own personal interest over his client's was not entitled to professional liability cover.

Right of subrogation of foreign insurer
Israel | 27 October 2015

The Tel Aviv Magistrates Court recently handed down an alarming judgment in a case regarding a subrogation claim filed by a foreign insurer against a tortfeasor that was allegedly responsible for a fire at the insured's premises. The court accepted the defendant's claim that a foreign insurer is not an insurer under the insurance law and thus cannot avail of the independent right of subrogation.

Insurance commissioner publishes draft guidelines on claims handling
Israel | 13 October 2015

The commissioner of insurance recently published a draft annex to the guidelines that dictate the conduct of insurers during the underwriting process and the claims handling process. The guidelines and the annex are relevant to all entities which file claims or demands against insurers, including insureds, beneficiaries and third parties that have been injured by an insured.

Right of insurer to subrogate against tortfeasor
Israel | 08 September 2015

According to the Insurance Contract Law, an insurer is entitled to an independent right of subrogation against the tortfeasor once it has compensated the insured. A recent claim examined whether the insurer's right to subrogate still exists where the insured claims the full amount of the loss from the tortfeasor while concealing that he or she has been compensated for part of the losses by the insurer.

Liability of insurer for sale of vehicle to third party
Israel | 11 August 2015

In a recent case the courts addressed whether an insurer is liable towards a third party that purchased a vehicle from it through an intermediary after the vehicle had been damaged in an accident and had not been properly repaired. Following contrasting magistrate court and district court decisions, the Supreme Court affirmed that the insurer was not liable for the plaintiff's damages.

Does the principle of double insurance always apply?
Israel | 16 June 2015

Double insurance applies when an asset is insured against one risk with more than one insurer for coincident periods. In a recent case, the question arose of whether the insurer of the tortfeasor, which paid the insurance benefits as a result of an insurance event, was entitled to participation from the insurer of the damaged party due to the fact that both insurers insured the same property.

Requirements for declination of insurance claims
Israel | 14 April 2015

Under directives issued by the commissioner of insurance to Israeli insurers, a letter of declination must include all arguments known to the insurer. Failure to do so means that the insurer will be unable to rely on additional arguments when a claim is filed with the court. Two recent Supreme Court rulings interpreted the commissioner of insurance's directives in different but complementary ways.

Can insured refuse to sign discharge and release form?
Israel | 03 February 2015

By signing a discharge and release form, an insured declares that it has received payment of insurance benefits from the insurer and waives any future claim against the insurer. A recent case involved a plaintiff's refusal to sign a discharge and release form due to differences of opinion between the loss adjuster and the insured.

Dismissal of claim filed by a special manager against D&O insurer
Israel | 09 December 2014

Directors' and officers' (D&O) coverage litigation is rare in Israel. Coverage litigation raises issues that frequently require the attention of the insurers' claims departments. In a recent case the District Court of Tel Aviv denied the claim of a special manager, finding that he had not proved that any D&O of the company was negligent or had committed any wrongful act.

Insurance benefits for property damage – exempt from tax payments?
Israel | 07 October 2014

The principle in insurance and tort claims regarding damage is 'restitution in integrum' – that is, the status of the damaged property should be returned, insofar as possible, to the condition before the occurrence. According to this principle, compensation paid by the insurer should enable reinstatement to the original condition. Tax payable on insurance benefits is an issue only partially covered by the Income Tax Ordinance.

Is unauthorised driving an aggravation of risk?
Israel | 19 August 2014

A court recently addressed the question of whether, in a motor vehicle insurance policy, adding one or more extra drivers, including young drivers, constitutes a major change to the insured's risk. The question was whether this would be considered a change of risk as specified in Section 17 of the Insurance Contract Law or a new risk, not covered by Section 17 or 18, which would require the purchase of a new and separate policy.

Distribution of insurance products not exclusive to insurance brokers
Israel | 10 June 2014

According to the Financial Services (Insurance) Control Law (1981), a party cannot engage in marketing insurance products unless it holds a valid licence issued by the commissioner of insurance. The Israeli commissioner of insurance recently published draft guidelines for parties which are not licensed insurance brokers.

National Insurance Institute's subrogation claim
Israel | 06 May 2014

Recent precedents have ruled that the limitation period for a subrogation claim by the National Insurance Institute (NII) against a tortfeasor is time barred seven years after the date of occurrence. However, a new amendment to the NII Law has extended the limitation period to 15 years. Insurers should prepare for possible NII claims as a result.

Insurer may be liable to pay damages for negligent rescue
Israel | 25 March 2014

In a recent case involving the sinking of a vessel in the Sea of Galilee, the insurer of a marine policy was discharged of liability under the policy. However, the insurer was found liable in tort under Israeli law for damages caused to the insured due to negligent acts by the insurer in salvaging the vessel. The insurer was ordered to pay the plaintiff the full value of the vessel, plus loss of profits and expenses.

Interpretation of insurance policy should follow standard and logical meaning
Israel | 15 October 2013

The Jerusalem Supreme Court recently ruled that the interpretation of an insurance policy should express the standard and logical meaning of the policy terms, rather than twisting the words in order to suit the interests of the insured. This decision sets an objective and fair precedent, in comparison to recent rulings by the lower courts in which the interests of the insured have been favoured over those of the insurer.

Failure to reduce risk: when are insurers exempt from liability?
Israel | 01 October 2013

In a precedential decision, judges ruled on one of the most repeated disputes that the lower courts have dealt with in recent years – namely, whether an insurer can avoid liability in the event that the insured overlooks a condition to apply security measures set in the policy. The insured, whose claim related to the theft of jewellery, had failed to comply with the security measures demanded by his insurers.

Commissioner of insurance issues new draft guidelines
Israel | 27 August 2013

The commissioner of insurance recently issued draft guidelines in respect of the limitation period in an insurance contract which includes coverage for disability. Under the guidelines, the insurer must agree to an insured's request to extend the limitation period for an additional two years, provided that certain conditions are met. The commissioner has also issued guidelines for drafting an insurance programme.

Courts dismiss attorney's insurance claim due to breach of trust
Israel | 23 July 2013

The Supreme Court recently upheld a prior district court judgment, determining that breach of trust was excluded from an attorney's professional indemnity insurance policy. The attorney had been refused an insurance payout in relation to alleged professional negligence. The court found that his behaviour had no wider implication and thus did not justify the granting of leave to appeal.

Limiting liability under D&O policies: court considers retroactive date clause
Israel | 14 May 2013

The Tel Aviv District Court recently handed down a guiding court decision regarding directors' and officers' policies, in which several important issues relating to the interpretation of liability insurance policies were decided on for the first time. Although the judgment is not a binding precedent, as it was not issued by the Supreme Court, it will act as a guiding decision for the lower courts (which deal with most insurance cases).

How to write an insurance policy exclusion
Israel | 23 April 2013

The Insurance Contract Law imposes a duty on insurers to highlight exclusions in insurance policies. Failure to act as required may abolish the exclusion. Questions of how an exclusion should be highlighted and whether it was in force were the focus of a recent Nazareth court judgment. The case concerned a council's failure to insure a 10-year-old pupil under a personal accident policy.

Court considers interpretation of bankers' blanket bond policy wording
Israel | 22 January 2013

Disputes regarding the interpretation of the wording of bankers' blanket bond policies are rarely brought before the Israeli courts. In a recent case, after 23 years of wrangling, the Supreme Court finally issued its judgment on whether such a policy would apply when notification was given after the policy period had expired and a third party discovered the occurrence.

Status of a reinsurer's deposit held by an Israeli reinsured
Israel | 06 November 2012

Reinsurers of Israeli insurance companies must put in place a deposit in order to ensure that claims will be paid even if the reinsurer experiences financial difficulties. This requirement poses various questions regarding the status of such deposit, especially in situations where the reinsured enters into liquidation, and whether the reinsurer may offset against a deposit any sums due to the reinsured.

Extra contractual damages imposed on insurer
Israel | 28 August 2012

A recent Supreme Court judgment that awarded damages to an insured for consequential loss due to late payment of insurance benefits beyond the policy limit has shaken up the Israeli insurance market. The court ruled for the first time that an insurer that paid the insured on a date later than that set by the Insurance Contract Law, and thus caused a loss of profits for the insured, should pay for said loss.

Court allows extension of limitation period for insurance benefits claim
Israel | 12 June 2012

The acknowledgement by an insurer that the insured has a right to receive insurance benefits may extend the period of limitation. In a recent case before the Haifa Magistrates Court, the court ruled that the insurer's acts constituted an admission of the plaintiff's right to the claim. The limitation period was therefore revised to begin on the date on which the admission was made, instead of the date of the accident.

Court rules on insurer's duty to inform insured of any policy exclusions
Israel | 03 April 2012

In Rotem Iftach v AIG Israel Insurance Company Ltd the Tel Aviv Magistrates Court recently ruled that an insurer has a duty to ensure that the insured is notified of any policy exclusions and that it understands them. The case involved an insured who was fatally injured by a motorcyclist in a traffic accident; however, the insurer refused to pay out on the policy to its beneficiary due to a 'two-wheel vehicle' exclusion.

'No fault' system: tax deductions on compensation paid to road accident victims
Israel | 06 December 2011

The 1975 Road Accident Victims Law imposes a duty on the driver of a motor vehicle to compensate the victim for bodily injury sustained as a result of a road accident, regardless as to who was at fault for causing the accident. The law further provides for full and total liability even if no blame can be attributed to the driver. Hence, victims of road accidents are ensured compensation payment.

Consequential losses: court rules on scope of product liability policy
Israel | 20 September 2011

The Court of Appeals recently handed down a decision in which it considered the cover afforded by a product liability policy. The court ruled that in the absence of an explicit coverage clause that states otherwise, loss of profit is not covered under a property or product liability policy. Additionally, the contract should be construed most strictly against the drafter and according to the insured's expectations.

Limitation period for liability insurance claim
Israel | 21 June 2011

A recent judgment by the Jerusalem District Court may change the current interpretation of the law concerning the prescription period for liability insurance. The judgment considerably prolongs an insurance company's exposure to indemnify claims filed by insured persons.

Insured's duty of disclosure before conclusion of contract
Israel | 12 April 2011

The Supreme Court recently handed down its decision in what could be a precedent-setting case. The court ruled that an insured was entitled to insurance benefits during the interim period between signing the health declaration and finalising the insurance contract, even though it was proven that the insured was aware of his deteriorating health which he did not disclose to the insurer.

Compensation for loss of profits due to late payment of undisputed insurance benefits
Israel | 22 February 2011

In 2005 restaurant owner Ehad Aham Food and Investments Ltd filed a claim against Hadar Insurance Company regarding a business insurance policy. The Tel Aviv District Court recently handed down its judgment, ordering the insurer to compensate the plaintiff for extensive loss of profits due to its late payment of undisputed insurance benefits that resulted in the plaintiff's inability to reinstate the business.

Approving filing of a class action: implications for D&O insurance
Israel | 14 December 2010

In recent years there has been an increase in the number of class action claims filed against directors and officers, mainly relating to securities and particularly following the global financial crisis. A recent Supreme Court judgment may have a dramatic effect on class action suits filed in Israel and, as a result, will affect directors' and officers' liability policies, which provide coverage for such claims, including defence costs.

What is damage to 'tangible property'?
Israel | 28 September 2010

The Jerusalem Supreme Court of Appeals recently determined that a product liability policy covers only physical damage caused to third-party property and not financial damages allegedly sustained thereby. Therefore, expenses accrued to detect a flaw or crack in pipelines - being merely a financial loss - were not covered under the policy in this case.

Is payment of ransom to mitigate losses covered by property insurance?
Israel | 13 July 2010

The payment of ransom in order to free a person who has been kidnapped or to release goods which have been stolen is a well-known practice that dates back centuries. Several recent Israeli court cases have dealt with the relationship between the payment of ransom by an insured and the insured's obligation to mitigate its losses.

Physical, accidental and unexpected damage under contractors' all-risk policy
Israel | 25 May 2010

The standard contractors' all-risk policy requirement is that loss or damage be physical, accidental and unexpected. In two leading cases the Supreme Court interpreted these terms and stated that even though under an all-risk policy the insured need not prove that its loss occurred due to a specific peril, the term 'all risk' does not grant unlimited cover, but rather insurance which is defined within the yardsticks stated in the policy.

What is the meaning of 'claims-made provision relating to professional liability policy'?
Israel | 20 April 2010

In a recent case the Tel Aviv Magistrates Court discussed the meaning of a 'claims-made provision relating to a professional liability policy'. When the plaintiff's lawyer failed to file his employment complaint and subsequently committed suicide, the plaintiff had to file the claim against the deceased's insurer, which had insured the deceased under a lawyers' professional liability insurance policy.

Claims Handling: Commissioner of Insurance Issues New Directives
Israel | 27 October 2009

The commissioner of insurance recently published new directives concerning claims handling and public appeals management by various institutional bodies, including insurance companies. Within the framework of the new directives, it is explained that claim settlements are an essential part of insurance company business and it is important to establish a clear set of rules which will apply to the settlement process.

Insurance Fraud to Reduce Applicable Deductible Releases Insurers from All Liability
Israel | 08 September 2009

In a recent judgment the Tel Aviv Magistrates Court denied an insurance claim on the grounds that the insured had provided false information regarding the identity of the driver of the insured car. The false information was provided in order to try to avoid payment of the high deductible applicable to damages caused by a young driver.

Extra-contractual Exposure Due to Wrongful Denial
Israel | 30 June 2009

The Haifa District Court has ruled that an insurer which failed to pay insurance benefits on time may be obliged to compensate the insured for the damage suffered as a result of the delay. The ruling necessitates a review of declination procedures and requires insurers to consider, before declining coverage, whether the declination is well founded.

D&O Insurance Policy Limit Acts as Factor in Settlement Approval
Israel | 21 April 2009

The Israeli Trade Bank Ltd collapsed following an embezzlement perpetrated by one of its clerks. A claim was filed against the bank's directors on account of their alleged failure to prevent the embezzlement or detect it in its early stages. An agreement was reached with the directors and their directors' and officers' (D&O) liability insurer. However, the court took issue with the limit of liability set in the D&O liability policy.

Prior Knowledge and Defence Costs under D&O Liability Insurance
Israel | 24 February 2009

In a recent case a defamation claim was filed against the appellant in the magistrates' court on account of his actions when serving as head of a local council. At the time the appellant was insured under a directors' and officers' local council liability policy; however, the insurer declined coverage, alleging that the appellant was aware of the potential claim against him prior to the policy's inception date.

Declination of Coverage - Directives and Limitations
Israel | 13 January 2009

Several years ago the commissioner of insurance issued two directives regarding an insurer's duty upon declination of coverage. Recently, several court rulings were handed down by the lower courts which discussed the implementation of the commissioner's directives. The rulings demonstrate that a declination of coverage letter should be drafted only after a thorough examination of all relevant facts.

The Insurance Broker's Status in Light of Recent Supreme Court Rulings
Israel | 21 October 2008

What is the status of an insurance broker and on whose behalf does he or she act? How does Israeli law perceive a broker's knowledge and does it regard this as information which is shared by the insurance company? This update looks at the Israeli legal perspective on these matters and discusses some recent developments regarding the insurance broker's status.

Commissioner of Insurance: Contributory Negligence Not Applicable
Israel | 20 May 2008

Until recently, Israeli insurers used the doctrine of contributory negligence to reduce insurance benefits paid out to insureds which contributed to the occurrence through negligence or breach of policy precaution terms. The commissioner of insurance recently published his position paper regarding the use of the legal theory of contributory negligence in insurance claims.

What is 'Damage to Tangible Property'?
Israel | 12 February 2008

In a case involving a defective oil pipeline, the Tel Aviv District Court accepted that a product liability policy was intended to cover only physical damage to third-party property as a result of defects in the insured product. Therefore, damages to the product itself and/or costs and expenses relating to its replacement, including costs incurred to trace the defects in the product, were not covered.

Subrogation Rights of the National Insurance Institute
Israel | 05 February 2008

The Jerusalem District Court has issued a ruling which may significantly influence the exposure of insurers and reinsurers under third-party/public liability policies. The decision altered the longstanding doctrine that the employer is always considered to be the payer of National Insurance Institute premiums, even if it is a recruitment agency which received a refund of these costs from the actual employer.

Late Notification under Israeli Law
Israel | 18 December 2007

Most insurance policies provide that, as a condition of the insurer's obligation under the policy, the insured must notify the insurer of an insured event as soon as possible after its occurrence. Despite the existence of such a provision, according to Israeli law an insured that fails to give the insurer timely notification of an occurrence will almost always be entitled to full insurance benefits.

Contributory Negligence - Must the Assured Bear a Portion of the Loss?
Israel | 16 October 2007

Insurers are often faced with cases in which part of the fault for the loss or damage lies directly or indirectly with the assured. Nevertheless, the insurer is obliged to pay insurance benefits regardless of the assured's acts. In recent years the Israeli courts have begun to apply the contributory fault doctrine to insurance cases.

Bankers' Blanket Bond Policies: Insurer Liability for Embezzlement
Israel | 31 July 2007

The Israeli courts rarely deal with criminal insurance policies in general, and with bankers' blanket bond policies in particular, resulting in few court judgments considering such policies. However, in May 2007 the Tel Aviv District Court handed down its decision in a case in which a bank's liquidator attempted to enforce an insurance claim as a result of embezzlement by the bank's directors.

Court Rules on Insured's Duty to Initiate Disclosure
Israel | 23 January 2007

The Insurance Contract Law 1981 significantly amended disclosure duties relating to the insurance contract. The insured's duty to initiate disclosure was reduced and the insurer's remedies in case of a breach of those disclosure duties were limited. In a recent judgment the Supreme Court analyzed this duty to initiate disclosure.

Insurer Cannot Raise Defence not Mentioned in First Declination Letter
Israel | 08 August 2006

The Supreme Court has held that an insurance company cannot raise new reasons for the declination of an insurance claim after the first letter declining coverage. The duty to detail all reasons for declination conforms with the objective of legal efficiency, enabling an insured to estimate the profitability of filing a claim with the courts.

Recent Decisions on the Application of Deductibles
Israel | 17 January 2006

In a situation involving repeated acts of negligence, the question of how many insured events occurred and how many deductibles should apply often arises. In such a case the Jerusalem Magistrates Court recently held that if the cause of damage is a single event then, no matter how many parties are affected, it should be considered as a single occurrence and thus only one deductible should apply.

Road Accidents: Compensation on a No-fault Basis
Israel | 27 September 2005

In 2003 the commissioner of insurance ordered the dissolution of Avner Insurance Co, a joint operation of which every Israeli insurer that insured bodily injury caused by road accidents was a member. This created significant interest in the Israeli motor vehicles bodily injury market. Now each insurer must find its own way to protect itself against such risk.

Scope of Authority of the Commissioner of Insurance: The Courts' View
Israel | 14 June 2005

In recent years the activities of the commissioner of insurance in supervising the insurance and capital market have become more intensive. The Israeli courts have thus been asked more frequently to define the scope of the commissioner's authority, as well as his potential liability.

Companies Law Amendments Influence D&O Policies
Israel | 05 April 2005

The Companies Law 1999 has been amended to clarify further the circumstances in which a company is permitted to indemnify its directors and officers. Amendments were also made to pierce the corporate veil against a director or officer of a company.

Awards for Bodily Injuries in Multi-jurisdictional or Domestic Disputes
Israel | 22 March 2005

When an Israeli citizen is involved in an accident outside Israel, the question arises of which yardsticks should be applied by the court in the jurisdiction where the accident occurred. The courts have often dealt with this issue due to the geographical proximity between Israel and the West Bank.

Is the Claims Made Provision Valid in Israel?
Israel | 25 January 2005

The latest Supreme Court ruling regarding claims made provisions has not resolved the confusion over whether the theory of claims made is valid in the courts. Although the court recognized claims made provisions as a legitimate basis of insurance, it did not examine previous allegations challenging the validity of such provisions.

Must Physical Loss be Sudden?
Israel | 05 October 2004

The standard contractors' all risk policy requirement is that loss or damage should be physical, accidental and unexpected. According to a recent Supreme Court judgment, there is no need to distinguish between physical damage that occurred as a result of a sudden peril and physical damage that occurred as a result of a gradual peril.

Supreme Court Precedent Heralds New Liability for Lost Years
Israel | 04 May 2004

The Supreme Court has agreed to acknowledge additional heads of damage for injured persons and estates. Previously, an individual whose life expectancy was shortened as a result of a wrongful act could recover compensation for loss of earnings regarding his remaining life expectancy only; compensation for loss of earnings in the so-called 'lost years' was not awarded.