THE SUPREME COURT (SC) has upheld an appellate court’s decision denying the P208.4-million insurance claim of mining company Platinum Group Metals Corp. (PGMC).
The ruling said that the damage caused by armed rebels to the company’s 89 trucks in 2011 was not covered under its insurance policy.
In a 23-page decision dated July 10 and made public on Oct. 25, the SC ruled in favor of the insurance company Mercantile Insurance Co., Inc. (Mercantile), saying that the damage to the insured trucks owned by PGMC was caused by an excluded risk in the policy.
PGMC said that armed individuals, claiming to be from the Communist Party of the Philippines–New People’s Army–Nationalist Democratic Front, attacked and damaged their trucks on Oct. 3, 2011, at their plant in Claver, Surigao del Norte.
The ruling said that the insurance agreement between the two parties covered external causes, including earthquakes, explosions, floods, and others.
The policy, however, did not insure against “loss or damage caused by or resulting from strikes, lockouts, labor disturbances, riots, civil commotions or the acts of any person or persons taking part in any such occurrence or disorder.”
It also did not cover “invasion, insurrection, rebellion, revolution, civil war, usurped (not unsurped) power…”
The SC ruled that the attacks by the rebel group fell under the exceptions stated in the insurance agreement.
“[T]he foregoing acts and circumstances, taken in their totality, constitute insurrection or rebellion that falls under the excepted risks in the insurance policy,” according to the ruling penned by Associate Justice Henri Paul B. Inting.
“Mercantile has discharged its burden by proving that the destruction of the insured trucks was caused by an excepted peril under the insurance policy,” the ruling said.
This decision upheld the Court of Appeals (CA) ruling dated Dec. 4, 2019, which stated that PGMC had yet to prove its legitimate financial interest in the damaged trucks. The company provided only photocopies of the sale contracts, not the original documents required by the Rules of Court.
The CA reversed the initial ruling of the Regional Trial Court dated Nov. 6, 2017, which argued that the policy’s terms were not clearly defined and should be interpreted in favor of the insured party. — Jomel R. Paguian