SUNWATER LTD V LIBERTY MUTUAL INSURANCE CO

[2022] NSWCA 273, New South Wales Court of Appeal, Chief Justice Bell, Justice of Appeal Macfarlan and Justice of Appeal Meagher, 16 December 2022

Insurance (liability) – Exclusion of liability arising out of the rendering of or failure to render professional advice or service – Whether exclusion applied to liability to non-clients as well as clients

The assured was held to be vicariously liable for losses caused to owners of property by flood damage in the Queensland floods of January 2011. The assured had been employed by the Queensland Bulk Water Supply Authority to provide flood management services, and liability was based upon the assured’s failure to perform the services contract with proper care and skill. The assured’s General and Products Liability Policy covered liability for, inter alia, property damage arising from any negligent act, negligent error or negligent omission. There was an exclusion for liability “arising out of the rendering of or failure to render professional advice or service for a fee by The Insured”.