§ Lord Kennetasked Her Majesty's Government:
Whether it is in accordance with public policy that activities in breach of law or regulation should receive insurance cover.
§ The Secretary of State for Trade and Industry (Lord Young of Graffham)It is well settled principle of insurance law that, generally speaking, an insured cannot recover under a policy of insurance in respect of a loss which has been caused by his own criminal act. The situation is however less clear cut where the breach of the law arises from inadvertance or carelessness. The validity of the contract would be a matter for the courts to decide in the light of the circumstances of the particular case. A contract of insurance is not necessarily void because the policyholder is in breach of the law at the time the damage was caused.