- Territorial Limits define where in the world the loss can occur. The policy schedule states what the territorial limits are, but often they are worldwide.
- Jurisdiction defines which courts the third party may use when suing the Insured. The policy provides worldwide jurisdiction.
- Choice of law defines which court will preside over any disputes between the Insured and the Insurers. The choice of law for this policy is South African Law.
- The Insured causes financial loss to a Belgian national by allowing a breach of security in the Insured’s operations based in the Netherlands. The Belgian sues the Insured in Belgium. Later, the Insured sues the Insurers in South Africa because they wrongly refused to pay the claim.
- In this example the Territorial Limits need to include the Netherlands and the jurisdiction needs to include Belgium.
- The Territorial Limits need be no wider than RSA if the Business is transacted in RSA even though some clients may be domiciled elsewhere.
The Choice of Law would always be South African and subject to the jurisdiction of a competent South African court if the Insured's principal office is located in South Africa.