Property insurance: the measure of indemnity

The decision of Thomas J in the High Court of New Zealand in Southern Response Earthquake Services Ltd v Shirley Investments Ltd [2017] NZHC 3190 is yet another in a long line of authorities on the measure of indemnity under a property policy.

The issues in the present case arose from the assured’s decision, following the total destruction of the insured premises, to purchase a replacement property subject to the financial limit of the cost of rebuilding on the existing site. The assured sought to treat the amount payable as including notional sums that would have been incurred only if there had been a rebuild on site.