Insurance Law Monthly

In two decisions issued on 22 April the Iowa Supreme Court held claims for Covid-19-related loss of use do not constitute covered “direct physical loss of or damage to property”.The decision came a day after the Supreme Judicial Court of Massachusetts also backed insurers in a business interruption case.

Adelaide (SA) Pools & Spa Manufacturing and Installation Pty Ltd and Others v Westcourt General Insurance Brokers Pty Ltd (No 2) [2021] SASC 123 is a very lengthy judgment of Doyle J in the Supreme Court of South Australia on the liabilities facing an insurance broker whose advice to the assured led to inadequate business interruption insurance being placed in terms of the value of potential lost revenue and an insufficient indemnity period. The case also raises important questions on the measure of damages and the principles of mitigation and contributory negligence.

Declaration policies operate by allowing the assured to declare particular risks to the insurers under a framework agreement whereby cover is in place at a specified earlier date and declarations inform the insurers of the risks that have been allocated to the contract. Most declaration policies are in obligatory form, so that as soon as the assured obtains subject matter within the terms of the policy, there is coverage. JDA Co Ltd v AIG Insurance New Zealand Ltd [2021] NZHC 2912 is an important decision of the New Zealand High Court, analysing the trigger for cover and the consequences of subsequent failure to declare the insured subject matter.

Sir Andrew Smith, sitting as a Justice of the Abu Dhabi Court of First Instance in Global Private Investments RSC Ltd v Global Aerospace Underwriting Managers Ltd and Others [2021] ADGMCFI 0008, considered the measure of indemnity under a valued policy on an aircraft. The key question was whether the sum insured included diminution in the value of the repaired subject matter.