When considering whether to reject a claim, insurers are often faced with the question: What conduct constitutes a breach of the reasonable precautions clause? Is it negligence or recklessness? This is often a consideration in motor claims involving speeding, but naturally arises in many different contexts.  In this article, we provide an overview of the South African jurisprudence on the topic, which varies between jurisdictions, and share our views regarding whether the recent High Court decisions in King Price Insurance Company Ltd v Sizwe Antonio Mhlongo (2022) and Sashin Govender v Guardrisk Insurance Company Limited (2023) affect this debate.

Until the Supreme Court of Appeal addresses the issue of what conduct breaches the reasonable precautions clause, with the result that the various divisions of the High Court must follow its precedent, we expect that uncertainty will continue and divergent approaches will persist.


In C&B Motors (Pty) Ltd v Phoenix of SA Assurance Limited (1973), the insured traded as a motor dealer and petrol station. It had a commercial policy in place under which it enjoyed insurance cover for, amongst other things, loss of money by any cause while on the insured’s business premises. Sums over R200 were to be stored in a locked safe or strongroom when the premises were closed for business. A special condition stated that the insured must take all due precautions for the safety of money as if it were not insured, especially regarding the selection and supervision of employees. The policy also included a general condition that due observance and fulfilment of its conditions was a condition precedent to the insurer’s liability.

The premises were broken into and money was removed from the safes which were opened using duplicate keys which had been kept on the premises in an empty carton on a shelf alongside other cartons.

In these circumstances, the court considered whether the special condition was breached through the insured and its employees failing or neglecting to place the keys to the safes in a secure place. It found that the test for determining whether the special condition, which is essentially a reasonable precautions clause, had been breached is “what the ordinary reasonable man in the position of the insured would have considered as adequate” (see also Price and Another v IGI Limited (1980)). This involves the question of whether the insured or those responsible for the conduct of its affairs were negligent in the precautions taken by them for the safety of the insured object.

The court took into account that the:

  • premises were securely locked up by the employees at the end of each day;
  • keys were only placed in the empty carton while the premises were locked and so it was unlikely that any unauthorised person would see them there;
  • hiding place was nevertheless naïve because shelves would naturally attract the interest of anyone looking for keys;
  • protection afforded by an open carton kept among a few other cartons, is negligible;

and found that the steps taken by the insured’s employees fell substantially short of those which a reasonable man would’ve judged adequate for the safety of money.

The approach of the court in this case suggests that negligence is sufficient to breach a reasonable precautions clause in Gauteng. However, recent decisions of the High Court in Gauteng, which will be discussed later in this article, appear to have adopted differing approaches which has the potential to create uncertainty.


Decisions on this topic in KwaZulu-Natal are inconsistent.

In Aetna Insurance Co v Dormer Estates (Pty) Limited (1965) the insured, which was carrying on business as a building contractor in Pinetown, suffered loss when its managing director lost his wallet which contained the insured’s money, while on a night out at a bar. The insurer provided cover to the insured for the loss of money up to an agreed maximum while the money was in transit or on the insured’s premises. The policy was subject to a reasonable precautions clause which required the insured to take all reasonable precautions for the safety of the property insured under the policy.

In considering what reasonable precautions should have been taken by the managing director, the court held that his conduct must be compared with what the ordinary reasonable man would consider adequate in the circumstances, suggesting a negligence test. 

The court considered that:

  • the managing director put the money in a wallet in his back pocket which, to his knowledge, had lost its button;
  • the wallet was bulky;
  • on prior occasions, the wallet had fallen out of the same shorts while the managing director was driving;

and found that he should’ve appreciated that when he sat in the bar with his friends, there was a reasonable risk that in the process of sitting, the wallet would work its way out or at least partially out of the pocket so that it could be removed without notice. On this basis, the reasonable precautions clause was found to have been breached.

However, the court in Nathan NO v Ocean Accident and Guarantee Corporation Limited (1959) adopted a different approach. The plaintiff, the executor of the deceased insured’s estate, sued the insurer in respect of damage to the deceased’s vehicle which was damaged after rolling from a bank. The insurer denied liability because it contended, amongst other things, that the way the insured drove breached the policy’s reasonable precautions clause. The court found that it was improbable that the insured, in taking a bend at 90 mph (approximately 145 km/h) intended to crash the vehicle and injure or kill himself as he attempted to swerve the vehicle away from the bank. The court’s view was that neither negligent nor reckless driving are sufficient to breach the reasonable precautions clause and, had that been the intention, it would have been simple to say so explicitly. That being the case, it was held that the insured did not breach the clause. The decision suggests that the court believed intentional conduct was necessary to successfully rely on a breach of the reasonable precautions clause.  

Western Cape 

In Santam Ltd v CC Designing CC (1999) the insured parted with possession of its (insured) Mercedes Benz following notification that the purchase price for it had been deposited into its bank account, only to later discover that a false cheque had been used. The insurer’s defense to the claim which followed was that the insured’s representative failed to take all reasonable steps and precautions to avoid the loss of the vehicle. The court reiterated that the purpose of motor insurance is to cover the insured in respect of the insured’s own negligence. It stated further that to construe a reasonable precautions clause as an exclusion of liability where loss or damage is caused by the insured’s own negligence would significantly curtail the cover. The court considered a plethora of case law and held that to rely on a breach of the reasonable precautions clause, the insurer must show that the insured acted recklessly. The questions to be asked were:

  • whether the insured’s representative recognized the dangers to which the insured was exposed; and
  • if so, whether he deliberately courted them by taking measures which he himself knew were inadequate to avert them or about the adequacy of which he simply did not care.

Considering that the insured’s representative received confirmation from the bank manager that the deposit was made by the buyer, despite being unable to confirm whether it had been by cash or cheque, the court found that the insured’s representative did not act recklessly and the reasonable precautions clause was therefore not breached.  

Supreme Court of Appeal 

In Renasa Insurance Company Limited v Watson (2016), the insureds (a lessor and lessee) submitted claims following a fire at the insured premises. The insurer raised two defenses, one of which was that the lessee failed to take reasonable steps to prevent the (unknown) arsonist from setting the fire manually i.e. a reasonable precautions defense.

The Supreme Court of Appeal found that to require an insured to take steps to prevent a loss, proof of foreseeability of loss is first required i.e. there must be proof that the reasonable person in the position of the insured would have foreseen the reasonable possibility of the loss eventuating and would therefore have taken reasonable steps to prevent it. Because it was common cause that a reasonable person in the position of the lessee would not have foreseen, as a reasonable probability, that an unknown arsonist would have attempted to manually set the premises alight, it could have hardly been required to take steps to guard against this. Therefore, the court dismissed the insurer’s defense.

The Supreme Court of Appeal’s approach suggests that negligent conduct is required to breach the reasonable precautions clause.

Latest decisions – Gauteng 

In King Price Insurance Company Ltd v Sizwe Antonio Mhlongo (2022), the insured was involved in a single vehicle accident which was an insured event under its policy with its insurer, but the insurer rejected the claim on account of the insured being untruthful regarding the events preceding the accident. On appeal from the Magistrates’ Court, the insurer alleged that the insured had been speeding but had not raised this ground in the initial rejection of the insured’s claim. The court observed that, if it had been material, the insurer would have raised a speeding defense initially, but seemed to adopt the approach that it would be irrelevant as the insured was covered for his own negligent driving, including excessive speeding.

Although the court did not have to delve into the question of what conduct constitutes a breach of a reasonable precautions clause, it appears to have accepted that excessive speeding constitutes negligence.

In Sashin Govender v Guardrisk Insurance Company Limited (2023), the insured and his mother were involved in a single vehicle accident after the insured lost control of the insured vehicle and collided with a lamp pole on the island separating the north bound lanes from the south bound lanes of the road, resulting in the insured vehicle being damaged beyond repair. The insurer rejected the claim on the basis that the plaintiff had been travelling at an excessive speed (135 km/h), considering that it was raining at the time of the incident, and this conduct constituted a breach of the reasonable precautions clause as the speed at which the insured was travelling was reckless. The parties were in agreement that recklessness would constitute a breach of the reasonable precautions clause.

The issue before the court in this case was whether, having regard to the prevailing weather conditions, the insured had been travelling at a speed which was so excessive that it amounted to recklessness. The court stated that irrespective of the speed at which the insured was travelling, the important consideration was whether it was foreseeable that there would be sufficient water on the road surface to cause the insured vehicle to lift from the ground (with the result that the insured lost control of it). Based on the evidence before the court, the court found that despite the weather conditions on the day of the incident, the insured did not know or foresee that the road conditions could cause him to lose control of the insured vehicle, and as such, found that the insured did not act recklessly.

While the court did not expressly deal with the question of what conduct constitutes a breach of the reasonable precautions clause, it appears that the court accepted that the required conduct is recklessness. The court’s approach seems to be based on the consensus between the parties that recklessness is required to constitute a breach of the reasonable precautions clause, but we note that it also specifically referenced Santam Ltd v CC Designing CC in its judgment. This may create some confusion, given the negligence standard applied in the earlier case of C&B Motors.


While we believe some outlooks have more merit than others, our advice to insurers is to:

  • in the first instance, consider the jurisdiction in which a contested claim is being adjudicated, what standard has been applied in that jurisdiction and whether there are any conflicting decisions in that jurisdiction. The decisions in other jurisdictions may, however, have persuasive value;
  • appreciate that decisions are fact dependent; and
  • anticipate the risk that a higher threshold than negligence may be adopted if the Supreme Court of Appeal makes a finding to that effect in future.

Written by Ina Iyer and Basetsana Maponyane