Authors: Glenn Biggs, Partner & Milton Latta, Special Counsel
An insurance contract is typically formed after a process of negotiations, which may involve the issuing of a quotation by the underwriter and the completion of a policy proposal by the contracting insured. The proposal will contain various information about the contracting insured, including the entities to be covered, which enables the insurer to assess the risk exposure and the cover to be provided.
The insurance contract itself will almost invariably comprise a standard policy wording and a specifically tailored policy schedule. However, the potential problem with having a standard form policy wording combined with a tailored policy schedule is it can lead to inconsistencies within the insurance contract.
When this occurs, questions can arise as to what takes priority – the schedule or the policy wording – and what weight is to be attached to pre-contract documents such as the proposal.
These issues were recently considered by the Western Australian Court of Appeal in Tokio Marine & Nichido Fire Insurance Co Ltd v Hans Bo Kristian Holgersson trading as Holgersson Complete Home Service [2019] WASCA 114.
