A. INTRODUCTION

9.1 There are two principal forms of insurance in respect of liabilities to third parties. One form is known as “liability” insurance which places an obligation on the insurer to pay any damages which the assured is likely to pay as a result of occurrences which are defined in his insurance cover. The insurer’s duty to indemnify arises on the occurrence of the insurance event.1 It is not necessary in the absence of express terms to the contrary, that the issue of the assured’s legal liability should have been adjudicated upon or decided against him or that he should have paid damages.2 It is sufficient for the purposes of recovery that the existence of legal liability is reasonably clear.3