Agents & Brokers 

Whether agents knowledge of true facts imputable to insurer: Farrell v National Mutual Life Association of Australasia Ltd (1991) 2 Qd R 624

Brokers placed insurance with underwriters – underwriter denied liability – whether contractual relationship between bank & brokers – whether brokers owed bank a duty of care: Punjab National Bank v De Bonville & Ors [1992] 1 Lloyds Rep 7

Where defendant acting as agent for insurer – no duty of care owed to the applicant for insurance: Duthie v Rolf H Wick & Assoc 120 ACTR 1

Calculation of Loss

Property damage and consequential loss – extent of insured’s obligation to act with reasonable dispatch after termination of policy by effluxion of time – availability of consequential damages where policy not terminated for breach – calculation of loss: Brescia Furniture Pty Ltd v QBE Insurance (Australia) Ltd [2007] NSWSC 598

Proof of loss dependent upon what plaintiff would have done – Causation to be established on balance of probabilities – Loss not to be characterised as loss of a chance: Crown Insurance Services Pty Ltd v National Mutual Life Assn of Australasia Ltd  [2005] VSCA 218

Claims Made Policies and Claims Made and Notified Policies

Notification of claim requirement – adequacy of notification – failure to comply – ss 40(3) and 54 of Insurance Contracts Act: Antico v CS Health [1996] 38 NSWLR 681

For distinction between the two and the effect of s.54 of the Insurance Contracts Act 1984 see: FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd (2001) 204 CLR 641 at 659ff and Gosford City Council v GIO General Ltd [2003] NSWCA 34 at p34] – [37].   

Where barrister held professional indemnity insurance policy pursuant to Legal Profession Act 1987 (NSW) – Where policy contained “known circumstances” exclusion clause – Where insurer denied liability under policy – Whether subjective thoughts of insured relevant to construction of clause – Whether exclusion clause constructed by reference to objective standard:  CGU Insurance Ltd v Porthouse (2008) 235 CLR 103; (2008) 248 ALR 240 at [54] – [72]

Notwithstanding the High Court’s decision in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, s 54 of the Act cannot be used with s 40(3) to overcome an insured’s failure to notify circumstances during the period of insurance, when the policy does not contain a ‘deeming provision’: Gosford City Council v GIO General Ltd [2002] NSWSC 511


In C E Heath Underwriting and Insurers (Aust) Pry Ltd v Edwards Dunlop & Co Ltd (1993) 176 CLR 535, Deane J at 541-2 (albeit in a dissenting judgment) referred to the “settled rule of construction” that if there be difficulty or obscurity of meaning, the words of an instrument are to be interpreted more strongly against him or her whose instrument it is and said that such rule was “particularly applicable to contracts of insurance”. His Honour went on:

… the courts should avoid a construction of a policy of insurance which has the effect that the insured, having paid a premium to be indemnified against loss caused by a particular kind of occurrence, is subjected to a new risk of not being insured against a loss of that kind by reason of the ambiguity or obscurity of the language which the insurer has seen fit to use in its policy.

Costs Policy 

Requirement of judgment or final adjudication – whether insurer can resist giving indemnity prior to judgment or final adjudication.- whether (under policy covering insured’s costs in defending proceedings that are themselves the subject of a claim under the policy) insured can rely on exclusion clause denying liability so as to avoid payment of costs under the policy pending the determination of the principal issue under the policy (yes it can ) Silbermann v CGU Insurance Ltd; Rich v CGU Insurance Ltd; Greaves v CGU Insurance Ltd [2003] NSWCA 203

Disability Insurance 

Definition of permanent total disablement – injury required to have lasted for at least 12 months  – whether permanent disablement has occurred may not become apparent for some indefinite period of time  – claims not limited to injuries that manifest a permanent total disablement within 12 months of injury  – cause of action accrues upon event of disablement occurring: Cigna v Packer (2000) 23 WAR 159

Condition of liablity that insurer form an opinion as to permanence of disability – obligations of insurer in forming opinion – effect of opinion being formed unreasonably and by application of wrong test – remedy of insured  – whether court to determine whether insured was totally and permanently disabled – whether court entitled to take into account evidence arising after insurer’s decision to reject the claim: McArthur v Mercantile Mutual Like Insurance Co Ltd (2002) 163 FLR 236

Death benefit –  critical illness benefit – illness or condition which is highly likely to result in death within twelve months – malignant non-Hodgkin’s lymphoma – whether the Policy responded – absence of words “with treatment” in the Policy – construction of Policy – whether regard to be had to available treatment – likely response to diagnosis – meaning of highly likely – mathematical probabilities – balance of probabilities – whether relevant that insured in fact survived beyond twelve months: Tower Australia Ltd v Farkas [2005] NSWCA 363

Double Insurance 

Double insurance – right of contribution – requirement for co-ordinate liability – where there is no negligence – no co-ordinate liability: QBE Insurance (Australia) Ltd v Insurance Australia Ltd [2011] ACTSC 40

Duty of Disclosure 

General insurance – obligations of disclosure of insured – duty to disclose matters relevant to decision whether to accept risk even though matters unrelated to risk as such – whether knowledge of relevant matters by agent imputed to principal however the knowledge acquired – circumstances in which a belief amounts to knowledge of a fact interpretation of the words “a matter relevant to the decision of the insurer whether to accept the risk” under ss 21(1) and 26(2) of the Insurance Contract Act 1984 (Cth): Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) (2003) 214 CLR 514; (2003) 197 ALR 364

Directors indemnified by company and by insurance – duty of disclosure and principle of utmost good faith – whether directors parties to policy – whether if not parties, directors had to disclose facts under the general law duty of utmost good faith – non-disclosure by third party not a defence – insured may rely on insured’s non-disclosure: CE Heath Casualty v Grey (1993) 32 NSWLR 25

Assured’s agent arranging re-insurance – agent’s fraud on assured not disclosed  – insurer purporting to avoid insurance – whether agent’s dishonesty “circumstances which in the ordinary course of business oug:ht to be known”: Group Josi Re v Wallbrook Insurance Co Ltd [1996] 1 WLR 1152

Duty of Good Faith 

For the principles relating to the source and content of the duty of good faith, see Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd  (formerly GIO Insurance Ltd ) [2006] NSWSC 223 (2 of 2) at [1109]

The wider view of the requirement of utmost good faith should be adopted in preference to the view that absence of good faith was limited to dishonesty – utmost good faith might require an insurer to act with due regard to the legitimate interests of an insured, as well as to its own interests: CGU Insurance Ltd v AMP Financial Planning Pty Ltd (2007) 235 CLR 1; (2007) 237 ALR 420

Exclusion Clauses

Whether loss within policy if one of possible causes is not an excluded cause: Countrywide Finance v State Insurance [1993] 3 NZLR 745

Meaning of custody and control within exclusion clause under policy: Botany Fork v NZI [1993] 44 FCR 27

Insured had personal accident and sickness policy with insurance company – clause provided policy did not apply where injury caused by insured engaging in professional sporting activities – engaged in sport of harness racing – injured whilst exercising horse: Harpley v QBE Insurance Ltd [1999] NSWCA 145 

Meaning of “dishonesty or fraud” exclusion in professional indemnity policies: Chittick v Maxwell  (1993) 118 ALR 728 at 746 to 748

Scope of coverage – flood insurance – action for recovery of moneys under policy of insurance – extent of exclusion clause: Eastern Suburbs Leagues Club Ltd v Royal & Sun Alliance Insurance Australia Ltd [2003] QSC 413

Professional indemnity insurance – dishonesty exclusion: Wilkie v Gordian Runoff Ltd [2005] HCA 17

Whether a non-party to an insurance policy can sue to enforce a promise of indemnity expressed to be for their benefit – privity of contract – limitation of liability – where an express exclusion of liability exists in respect of one cause, an insurer is not liable to an insured even where there is no exclusion in respect of a concurrent cause: Rail Corporation of New South Wales v Fluor Australia Pty Ltd [2008] NSWSC 1348 

latest High Court case: Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd and Others – (2009) 261 ALR 468; [2009] HCA 50 from which following is taken at [37] The central question in this appeal is: was s 45(1) of the Act engaged? That subsection provides that a provision included in a contract of general insurance is void where it has the effect described in the subsection. Subject to a qualification not relevant in this matter (about insurance required to be effected by law) the effect specified in s 45(1) is “the effect of limiting or excluding the liability of the insurer under the contract by reason that the insured has entered into some other contract of insurance”.

Fidelity Policy 

Loss covered only if discovered within one year of end of “policy period” – “Policy period” twelve months from inception of policy – whether “policy period” each annual period or aggregate of periods: C.E. Heath Underwriting & Insurance (Australia) Pty Ltd v Edwards Dunlop & Co Ltd (1992-1993) 176 CLR 535

Fire Insurance 

When is a building “unoccupied”: Livock v Suncorp Insurance and Finance (1995) 1 Qd R 206

Property damaged by fire – further damage by fire before payment or commencement of restoration and after expiry of policy – liability for subsequent damage: CIC Insurance v Bankstown Football Club (1997) 187 CLR 384


Meaning of fraud – insurer’s entitlement to refuse fraudulent claim  – whether fraud must be material to entitlement to indemnity: To v Australian Associated Motor Insurers [2002] 3 VR 279

Operation of s.56 Insurance Contracts Act where only a minimal or insignificant part of the claim is made fraudulently and non-payment of the remainder of the claim would be harsh and unfair: Moxia Pty Ltd v AMP Insurance Ltd (Unreported decision of Beach J VSC 21 September 1992)

Professional indemnity insurance – dishonest, fraudulent or reckless misstatement – meaning of “dishonest” and “fraudulent” – whether motivation is necessary to prove dishonesty – non-disclosure – whether if the circumstances were disclosed, insurance would have been refused – meaning of “know”, “known” and “knows” pursuant to s 21 Insurance Contracts Act 1984 (Cth) A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 520


Insurer unreasonably withholds payment – liability of insurer to pay interest – whether inconsistent with State law permitting award of interest on damages or money due at higher rate: Moss v Sun alliance Australia Ltd (1990) 93 ALR 592

Right of a 3rd party to recover against insurer – s. 51 of Ins Contracts Act : Trident v McNiece (1988) 165 CLR 107; (1988) 80 ALR 574

Late payment of claim – whether breach of contract – whether delay reasonable – whether interest payable on late payment: Settlement Wine Co Pty Ltd v National & General Insurance [1994] 62 SASR 40

Insurance payout under a mistake of fact not recoverable: CIC Insurance v Tancredi (unreported decision of Nathan J in Vic Supreme Court 7 December  1995) which followed Prudential Assurance v Breedon [1994] 2 VR 452

Mortgage protection insurance – benefits payable upon disablement – total inability to engage in or attend to a remunerative occupation – remuneration used in popular sense as meaning  “profitable”- nature of disablement required: National Mutual Life Association Ltd v Richards (1995) 12 WAR 351

Joinder by plaintiff of defendant’s insurer – whether present legal controversy between plaintiff and insurer – whether “just and convenient” to join insurer – declaration sought to hypothetical question: CE Heath Casualty & General Insurance v Pyramid Building Society [1997] 2 VR 256

Death of assured resulting from suicide – suicide aided and abetted by beneficiary – whether beneficiary precluded by forfeiture rule from benefitting under life insurance policy: Dunbar v Plant [1997] 4 AER 289

Third party motor vehicle insurance – double insurance – accident caused by failure of retread tyre – liability of company who sold tyre and person who fitted tyre: Mercantile Mutual Insurance (Aust) Ltd v AAMI Ltd [1999] NSWCA 200

Stolen motor vehicle – refusal of insurer to indemnify owner for stolen vehicle – basis – fraudulent failure to disclose details of poor driving record: Suncorp General Insurance Ltd v Cheihk [1999] NSWCA 238

Charge – attachment – application to enforce charge on insurance moneys against insurer – application for leave to sue in respect of charge: Aulich v QBE Insurance Ltd [2002] ACTSC 61

Income Protection Insurance 

Total disability – application for declaration and orders – plaintiff sought declaration of entitlement to total disability benefit under income protection policy, payment in arrears and damages – plaintiff failed to prove inability to perform income producing duty of former occupation due to sickness on balance of probabilities: McIver v National Mutual Life Association of Australasia Ltd (t/as Australian Casualty and Life) [2006] VSC 437

Income protection insurance – fraud: Bottrell v National Mutual Life Association of Australasia Ltd [2007] NSWSC 458

Industrial Special Risks 

Interpretation of policy – whether insurer liable for consequential loss in absence of physical damage to property: Allstate Explorations NL v QBE Insurance (Aust) Ltd [2007] VSC 380


Operation of s. 57 of Insurance Contracts Act – observations on the meaning of “payment” and “pay” in the Act: Fruehauf v Zurich (1993) 32 NSLWR 735

Joinder of Insurer

Factors affecting discretion to order joinder – applicants suing former directors and company in liquidation for breach of duty – application to join company insurers as respondents to obtain declaration that insurers liable to indemnify directors – unlikelihood of any judgment being satisfied by corporate respondent – need to avoid multiplicity of proceedings: Ashmere Cove Pty Ltd v Beekink (No 2) [2007] FCA 1421

Life Insurance 

Suicide – what constitutes – onus and standard of proof: Clark v NZI Insurance (1991) 2 QdR 11

Avoidance of policy – non-disclosure of medical condition: Davis v Westpac Life Insurance Services Ltd [2007] NSWCA 175

Misrepresentation and Non-disclosure 

Facts believed to be true – knowledge of agent to insure – misrepresentation by omission silence – incomplete statement constituting misrepresentation: Permanent Trustee Australia v FAI General Insurance (2003) 214 CLR 514; (2003) 197 ALR 364 

Professional indemnity insurance – dishonest, fraudulent or reckless misstatement – meaning of “dishonest” and “fraudulent” – whether motivation is necessary to prove dishonesty – non-disclosure – whether if the circumstances were disclosed, insurance would have been refused – meaning of “know”, “known” and “knows” pursuant to s 21 Insurance Contracts Act 1984 (Cth) A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 520

“Other insurance” provisions

Operation of s.45 of Insurance Contracts Act: Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd and Others (2009) 261 ALR 468; [2009] HCA 50


Misrepresentation – incomplete proposal – s.26 Insurance Contracts Act: Hendry Ray & Court  FAI General Insurance (1991) 5 WAR 376

Reasonable Settlement 

Settlement sum – reasonableness: Kernaghan v Corrections Corporation of Australia Staff Superannuation Pty Ltd (No 2) [2007] FCA 1040


Passing of risk – insurable interest – goods stolen prior to loading: New South Wales Leather v. Vanguard Insurance (1992) 25 NSWLR 699

Settlement is Liability v Settlement is Irrelevant

Settlement is liability approach: Hurlock & Ors v The Council of the Shire of Johnstone & Anor [2002] QCA 256

Settlement is irrelevant approach: The Distillers Co Bio-Chemicals (Australia) Pty Ltd v Ajax Insurance Co Ltd (1974) 130 CLR 1