Insurance Corporation of Sri Lanka v. Seneviratne – sllr 2002 volume 1 page 396

In INSURANCE CORPORATION OF SRI LANKA v. SENEVIRATNE, the court addressed the recoverability of consequential loss damages under an insurance contract, specifically considering the principles of proximate cause and the doctrine of remoteness as applied to insurance policy limitations. The findings established that the insurer’s liability is restricted to losses directly and proximately caused by the insured peril, and that contractual exemption clauses effectively bar additional claims for consequential loss beyond the agreed sum. Citing Hadley v. Baxendale and Victoria Laundry v. Newman, the decision clarified that only the policy’s specified value is recoverable, with the award for consequential loss set aside. This case reinforces the principle that insurance recovery is limited by cont