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n Annual Survey of South African Law - Insurance law
Construction guarantees provided by insurers continue to be the subject of litigation.
The facts in Lombard Insurance Co Ltd v Landmark Holdings (Pty) Ltd and Others 2010 (2) SA 86 (SCA) were rather complicated as they involved not only several contracts but also a number of parties. They may be summarized as follows.
The insurer was a registered short-term insurer and entitled to issue guarantee policies in terms of the Short-term Insurance Act 53 of 1998 ('SIA'). It issued a construction guarantee on behalf of a construction company (Landmark) in favour of a training academy.
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