Insurance Law Monthly

The decision of Anderson J in the Federal Court of Australia in PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd [2020] FCA 137 is a useful analysis of the settled principles applicable to a claim by a client against its insurance brokers where the policy procured by the brokers excluded a risk for which insurance would have been sought had the client been informed of the lack of cover.

In Briese v Allianz Australia Insurance Pty Ltd [2019] VCC 2170, a matter heard by HHJ Murphy in the Victoria County Court, the question was whether the failure by the insurers to carry out their obligation to effect repairs on damaged property was their fault or that of the assured. In concluding that the assured was guilty of breach of contract, the court considered the role of the duty of utmost good faith in the claims process.

The decision of the Court of Appeal in Endurance Corporate Capital Ltd v Sartex Quilts & Textiles Ltd [2020] EWCA Civ 308 is a masterful restatement of the measure of indemnity under a property policy where there is no fixed means of calculation. The judgment of Leggatt LJ clarifies the issues of when the loss is to be calculated, the role of mitigation and the relevance of betterment.

In AB and Another v Transform Medical Group (CS) Ltd and Another [2020] CSOH 3 the Outer House of the Court of Session ruled that an agreement between the assured and its liability insurers in advance of the assured’s administration could not be attacked by third-party claimants, even though its effect was to limit their practical ability to enforce future judgments against the assured under the Third Parties (Rights Against Insurers) Acts 1930 and 2010. However, in this case there was no evidence of bad faith or collusion.