Insurance liability exclusion

KR and others v Royal & Sun Alliance plc CA TLR 8 November

The claimants, when children, had been abused in care homes run by a company insured with the defendant. At a special inquiry, the claimants were found to have been abused and, because the company was now in liquidation, the claimants brought proceedings against the defendant insurers directly under s1 of the Third Parties (Rights Against Insurers) Act 1930. Following Lister v Hesley Hall [2002] 1 AC 215 claims in negligence grounded on vicarious liability can be established when abuse is closely connected with the abuser’s employment. However, the insurance policy contained a clause excluding liability for damage or injury caused by the deliberate acts of the insured. The trial judge held that the company was covered by the policy and it did not fall within the exception.