Protection of co-assureds

It is settled law that co-assured B is immune from a subrogation action by insurers if they have been required to indemnify co-assured A for a loss caused by co-assured B. There are two limitations to the immunity of B: the policy must cover B for the loss in question; and B’s conduct must not have given the insurers a defence in the event that a claim had been made by B itself. Tate Gallery (Trustees) v Duffy Construction Ltd [2007] EWHC 361 (TCC) illustrates each of these points. The case is also important in that it attempts to reconcile the conflicting authorities on the meaning of ‘flood’ in an insurance policy. In a sequel decision, Tate Gallery (Trustees) v Duffy Construction Ltd (No 2) [2007] EWHC 912 (TCC), the Court considered whether the insurers had a valid defence under a reasonable care clause.