Illegal construction can lead to claim denial

Since the insured didn't oppose the illegal addition to the structure, the National Commission held the claim for loss of stock had been rightly repudiated

Nissan Enterprises, a company engaged in the trading of electronic items including cellphones, their accessories, cameras, and other audio-video consumer electronics, had purchased a policy from National Insurance to cover its stock stored in a warehouse in Bhiwandi. The policy was for a sum of Rs 5 crore and was valid from April 18, 2013, to April 17, 2014.

During the tenure of the policy, there were heavy rains and waterlogging due to which the building collapsed. Several people were injured, and some also died.

Nissan Enterprises filed a claim citing subsidence as the cause of the build-ing’s collapse. National Insurance appointed