Scope of activities

Liability policies restrict the scope of their coverage to losses arising out of particular activities carried on by the assured. In Lane v Dive Two Pty Ltd [2012] NSWSC 104 the main question for the Supreme Court of New South Wales was whether the injuries inflicted by the assured on a third party arose from an activity connected with the assured’s business. The case also raised the scope of an exclusion for criminal activity and the potential fallback liability of brokers for failing to obtain proper cover.

Lane: the facts

The defendant, DTP, carried on a scuba diving business, using a 7.45 m aluminium dive vessel called Dive One. DTP was controlled by Mr Todd. In the early afternoon of 29 July 2006 Mr Todd picked up passengers for a trip. They did not pay for the trip, and there was no swimming or diving involved. Later that afternoon Dive One collided with a vessel from which Mr Lane was fishing. Mr Lane suffered serious injuries as a result of the collision. Mr Todd was charged with dangerous navigation occasioning grievous bodily harm under the Crimes Act 1900 on the basis that he was navigating at a dangerous speed. Mr Todd was also charged with negligent navigation under the Water Traffic Regulations. On 6 November 2006 Mr Todd pleaded guilty to the dangerous navigation offence.