Insurance Law Monthly

An insurer who has paid sums to a policyholder for the purposes of reducing an insured loss has subrogation rights in respect of any recovery from the third party responsible for the loss. In exceptional circumstances an insurer may make payment to the policyholder for reasons other than the provision of indemnity for an insured loss. In Technology Swiss Pty Ltd v AAI Ltd trading as Vero Insurance [2021] FCA 95, Allsop CJ considered how a settlement agreement which made no reference to the insured loss should be construed.

In Lord Bishop of Leeds (The Right Reverend Nicholas Baines) and Another v Dixon Coles & Gill and Others [2021] EWCA Civ 1211; [2021] Lloyd’s Rep IR Plus 27 the Court of Appeal analysed the wording of the Solicitors Regulatory Authority Indemnity Insurance Rules 2013 whereby solicitors are required to carry insurance of at least £2 million per claim under wording complying with the Minimum Terms and Conditions of Professional Indemnity Insurance. The question was whether long-standing and systematic fraud by one of the partners in a firm of solicitors had given rise to claims arising from “one series of related acts or omissions” for the purposes of the aggregation clause in the insurance.

In Gemmell v KSL Hair Ltd and Others 2021 SAC (Civ) 6 the Scottish Sheriff Appeal Court held that a professional indemnity policy did not extend to surgical procedures. The court left open the question whether there was accidental injury where the assured negligently carried out an intended surgical procedure.

Murray Goulburn Cooperative Co Ltd v AIG Australia Ltd [2021] FCA 288 concerned the proper construction of “sideC” cover in a directors’ and officers’ policy, ie, cover for the company’s own direct liability to third parties rather than cover for the liability incurred by the directors. Beach J in the Federal Court of Australia rejected a series of defences raised by the insurers in respect of class actions against the assured company by purchasers of its securities.