Termination due to Default and Unilateral Revocation of the Insurance Contract – Ruling Analysis – Supreme Court of Justice

Abstract

The Supreme Court of Justice, in judgment SC3281-2024, resolved a dispute between Hacienda Las Caritas S.A. and Seguros Generales Suramericana S.A. concerning a fire in 2016. The controversy centered on whether the insurance contract had ended due to default in premium payments or through unilateral revocation, linked to a loan agreement with the insurer’s affiliate. The Court held that neither automatic termination nor unilateral revocation had been legally triggered, meaning the policy was in force at the time of the loss and the insurer was bound to indemnify. The ruling underscores the autonomy of mandatory insurance contract rules in relation to connected contracts and the strict compliance required for termination of coverage.