Authors: Glenn Biggs, Partner, Liana Isaac, Associate & Thomas Finn, Law Graduate
Dual insurance occurs where two or more insurance policies cover the same insured risk. Claims for dual insurance between insurers are often complicated by 'other insurance' clauses whereby a policy seeks to exclude or limit coverage because of the existence of the other policy.
In the recent decision of Allianz Australia Insurance Ltd v Certain Underwriters at Lloyd’s of London [2019] NSWCA 271, the New South Wales Court of Appeal examined the interplay between an ‘excess clause’ in one policy and the ‘escape clause’ in another, and found both insurers were required to indemnify an insured for its liability to pay damages.
Background
On 8 September 2009, Mr Thomas Dempsey was working for a company subcontracted by Baulderstone Hornibrook Pty Ltd (Baulderstone) when he sustained serious injuries after being struck by a vehicle. Baulderstone was insured under two policies which would potentially respond to Mr Dempsey’s claim for damages, though it was not a contracting party to either policy.2 The two policies were:
- Policy 1 issued by Allianz Australia Insurance (Allianz) to the Roads and Traffic Authority of NSW which covered Baulderstone as ‘any contractor’ of RTA; and
- Policy 2 issued by Lloyd’s of London (Lloyd’s) to Bilfinger Berger Australia Pty Ltd which covered Baulderstone as a subsidiary of Bilfinger.
Dempsey obtained a consent judgement against Baulderstone for $1,025,000 which Allianz paid under its policy. Allianz then commenced proceedings seeking equitable contribution for the indemnity from Lloyd’s as another insurer liable to indemnify Baulderstone.
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1 This meant s 45 of the Insurance Contracts Act 1984 (Cth), which renders 'other insurance' provisions in a policy void, did not apply.
