In a recent decision, the Colombian Supreme Court of Justice (hereinafter, the “CSJ”) resolved a dispute between (i) a public transportation operator, policyholder and insured under an automobile property damage insurance policy, and (ii) the insurer that issued the insurance.

The dispute turned on the insured company’s right to receive indemnification for the damage sustained by its vehicles because of acts of vandalism that occurred during the 2021 national strike.

Background:

The dispute arose from the insurer’s refusal to indemnify damages resulting from over 200 attacks on public service buses during the 2021 national strike. The affected vehicles were covered under the property damage insurance policy. After a second instance ruling in favor of the insured, the insurance company filed a constitutional action before the CSJ, arguing that the occurrence of the insured event had not been properly proven, and therefore, it was not obligated to pay the indemnification.

The CSJ upheld the ruling against the insurer based on the following considerations:

1. The insured cannot be required to provide impossible evidence
   
   Found unreasonable to demand that the insured had to prove, with precision, the manner, time, and place of each individual damage sustained by the vehicles, when the insured event itself constituted a notorious fact arising from the widespread, anonymous, and violent acts that occurred during the protests.
   
   In such contexts, it was also disproportionate to require the insured to identify the individual responsible for each act of damage, since the nature of the covered risk inherently prevented the identification of specific perpetrators without undermining the insured’s right to indemnification.
   
   The CSJ further characterized the requirement to individualize the perpetrators as a form of “diabolical proof”, incompatible with the nature of the insurance contract and with the real-world conditions under which large-scale insured events typically occur.
    
2. Indirect evidence, notorious facts, and reasonable records are admissible
   
   Official reports, photographs, complaints filed with authorities, the insured’s internal records, and widely known public facts are all valid means of proving the occurrence of the insured event. The CSJ restated that an insurance contract does not require absolute proof, but rather sufficient evidence to establish that the insured event occurred.
    
3. Insurance coverage and proof of the loss
   
   The insurance contract expressly covered damages resulting from riots, civil commotion, and disturbances. It also confirmed that these events were not excluded under the insurance policy.
   
   Also clarified that, unlike terrorism (which would require identifying the perpetrator as a member of an organized armed group), the riots that took place during the 2021 national strike fell within the scope of the covered risks and did not require the individual identification of the aggressor.
    
4. Amount of indemnity
   
   To determine the amount of indemnity, the CSJ considered the actual damage sustained and the expert reports submitted in the proceedings. Ultimately, the CSJ upheld the ruling against the insurer, including the obligation to pay default interest in accordance with Article 1080 of the Colombian Commercial Code.

For more information, please do not hesitate to contact our Insurance and Reinsurance team.