4.    Ordinary Meaning – Words and phrases in a policy should be given their ordinary or natural meaning while sentences should be accorded their ordinary grammatical meaning. This rule is justified on the premise that insurance practices and usages evolved.

a)    Leo, Rapp Ltd Vs Mc Clure
[1955] 1 Lloyds Rep. 292
Stocks of metal were insured against theft whilst in warehouse anywhere in UK. Some metal was loaded into a lorry parked in an open space in a locked compound enclosed by a thick wall toped by barbed wire and was stolen. It was held that the loss was not covered by the policy as the compound did not constitute a warehouse. In the words of Devlin L.J.

“When the court is construing words in an insurance policy, it must give them their ordinary natural meaning.

b)   Thompson Vs Equity Fire Insurance Co.
 [1910] AC 592, 103 LT 153
The words must be construed in their ordinary meaning. A building which was destroyed by fire had been insured under a policy which exempted the insurance company from liability for loss while gasoline was stored or kept in it. The fire was caused by a small quantity of gasoline in a stove used for cooking purposes. No other gasoline was used in the building. It was held by the judicial committee of the Privy Council, that the insurance company was liable. The words “kept or stored’ must be construed in their ordinary meaning. They implied a considerable amount of gasoline or at least keeping it in stock fro trading purposes.

Lord MaCnaghten at pg 154 said;

“What is the meaning of the words ‘stored or kept’ in collocation and in the connection in which they are found they are common English words with no precise or exact signification. They have a somewhat kindred meaning and cover very much the same ground. The expression as used in the statutory condition seems to point to the presence of a quantity not inconsiderable or at any rate not trifling in amount, and to import a notion of warehousing or depositing for safe custody or keeping in stock fro trading purposes. It is difficult, if not impossible, to give an accurate definition of the meaning, but if one takes a concrete case, it is not very difficult to say whether a particular thing is ‘stored or kept’ within the meaning of the condition. No one probably would say that a person who had a reasonable quantity of tea in his house fro domestic use was ‘storing and keeping’ there, or [to take the instance of benzene, which is one of the prescribed articles] no one would say that a person who had a small bottle of benzene for removing grease spots or cleansing purposes of that sort was ‘storing or keeping’ benzene.
Some meaning must be given to the words ‘stored or kept’. Their Lordships think those words must have their ordinary meaning. So construing them their Lordships come to the conclusion that the small quantity of gasoline which was in the stove for the purpose of consumption was not being ‘stored or kept’ within the meaning of the statutory condition at the time when the loss occurred.”
However technical meanings must not be resorted to unless necessary to amplify the ordinary meaning of words or phrases. Nevertheless, technical words or terms must be accorded their technical meaning while technical legal terms must be given their strict technical meanings.

London and Lancashire Fire Insurance Co Vs Bollands.
[1924] AC 836.
Technical legal words must be given their strict technical meaning.

A burglary policy relating to premises as a bakery excluded the liability of the insurance company if loss or damage resulted from “a riot”. Four armed men held up the employees with revolvers and seized money in a cashier’s office. There was no other disturbance at all in the neighborhood. It was held by the House of Lords that the Word ‘riot’ was used in its technical legal meaning and the action of the armed men constituted “a riot.” Consequently the insured could not recover under the policy.
Lord Sumner at 648 stated;
“It is true that the uninstructed layman probably does not think under the word ‘ riot ‘, of even such a scene, as described in the cases stated. How he could describe it I know not, but he probably thinks of something, if not more picturesque, at any rate more noisy. But there is no warrant here for saying that when the proviso uses a word which is emphatically a term of art, it is to be confined, in the interpretation of the policy, to circumstances which are only within the popular notions on the subject and are not within the technical meaning of the word. That clearly must be so with regard to martial law, that I think, must be so with regard to acts of foreign enemies; and I see no reason at all why the word ‘riot’ should not include its technical meaning as clearly as burglary or house-breaking do.”


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