Insurance Law Monthly

In Ritchie v Advanced Plumbing and Drains Pty Ltd [2022] NSWSC 330 the New South Wales Supreme Court discussed the scope of a public liability policy, the effect of a reasonable care clause and the importance of an endorsement banning welding.

Australian property policies insuring against flood have long contained limits on recovery, often in the form of a full exclusion, for floods in the form of water overflowing from watercourses, lakes, etc. Landel Pty Ltd v Insurance Australia Ltd [2021] QSC 247, decided by Dalton J in the Queensland Supreme Court, is the most recent authority on this wording. The case also discusses causation issues.

In Piraeus Bank AE v Antares Underwriting Ltd and Others [2022] EWHC 1169 (Comm) Calver J gave extended consideration to the circumstances in which a mortgagees’ interest insurance policy responds where the owners’ insurers have denied liability. As is well known, MII insurance is a fallback cover for a bank or other lender which is unable to recover as assignee or loss payee under the owners’ policy. The issue in Piraeus Bank was whether the MII policy responded in circumstances where the loss fell outside the scope of the owners’ insurance.

The English courts have recognised that if, as between two contracting parties, one has the obligation to take out liability insurance for the benefit of both parties, the insuring party is generally to be taken as having agreed to bear the risk of any third-party claim. That is, however, subject to other terms in the contract. In Capital Sewer Servicing Inc v Crosslinx Transit Solutions Constructors 2022 ONCA 10 the Ontario Court of Appeal decided that the other provisions of the contract made it clear that the risk was to be borne by the other party.