HWL Ebsworth Lawyers has issued its General Insurance Insights report, detailing recent Australian court decisions that may influence practices within the insurance sector.
Covering cases from August to October 2024, the report offers analysis on decisions impacting policy wording, coverage interpretation, and liability determinations in various commercial insurance contexts.
The plaintiffs in this case, owners of hospitality venues in Melbourne, sought business interruption coverage due to COVID-19 lockdowns under their Industrial Special Risks (ISR) policies. These policies provided for physical damage coverage and business interruption if property damage occurred.
Additionally, the policies included a “CLOSEXB4 Closure by Order of a Public Authority” endorsement, which applied to losses arising from mandated closures by health authorities.
The court ruled in favour of the insurer, concluding that the CLOSEXB4 endorsement required a specific closure order affecting premises in the “vicinity” of the insured properties, not general state-wide restrictions.
HWL Ebsworth said that the court’s decision narrows the interpretation of such endorsements, reinforcing the necessity for precise policy language regarding “vicinity” and the conditions under which public authority orders may trigger coverage.
This case addressed whether a seed distributor could be held liable for economic losses incurred by buyers due to seed contamination.
The High Court upheld a previous ruling, agreeing that the distributor’s disclaimer effectively limited liability for such indirect losses and that the distributor did not assume a duty of care to prevent purely economic losses.
HWL Ebsworth noted that this decision reiterates the role of disclaimers in protecting suppliers against liability for economic damages when no direct duty of care has been established.
The judgment underscores the need for clarity in product disclaimers and will likely influence risk assessments within product liability and distribution agreements.
In this matter, a child with disabilities was injured during a riding session provided by the Riding for the Disabled Association. The plaintiff argued that the association was negligent for failing to provide adequate supervision, leading to her injury.
The court found the association liable for not ensuring sufficient safety measures, but it dismissed claims against the plaintiff’s school, ruling that responsibility had been transferred to the association during the session.
HWL Ebsworth’s analysis pointed to the court’s emphasis on defined responsibility in third-party care situations. This case clarifies that liability may shift depending on contractual arrangements, particularly when care is fully delegated to a third-party provider.
Here, a mining company sought coverage under its insurance policy for liability in a workplace incident.
The insurer disputed coverage for certain defence costs, arguing that the principal’s extension clause only applied to specific damages.
The court ruled that the extension did cover claims linked to the principal’s negligence but excluded defence costs unless explicitly stated.
HWL Ebsworth noted that this case illustrates the importance of clear language in principal’s indemnity extensions. For insurers and insureds alike, the case underscores the need to distinguish between liability for damages and coverage for associated defence expenses.
This decision involved a workplace injury at a construction site, where the principal contractor was held largely responsible.
Although the contractor appealed for contributory negligence, arguing the worker’s awareness of hazards, the court apportioned primary liability to the contractor but agreed to a 20% reduction based on contributory negligence.
According to HWL Ebsworth, the ruling has implications for risk allocation on worksites, especially in defining the responsibilities of principal contractors versus subcontractors in managing worksite safety.
In this case, the lessee of heavy machinery was held liable after a fire damaged the equipment due to a breach of the contractual requirement to turn off the master key.
The court concluded that leaving the key in the “on” position represented a breach that led to a foreseeable risk of damage.
HWL Ebsworth’s commentary highlighted that this decision underscores contractual compliance in equipment leases. Liability for foreseeable damage can result if safety provisions are not adhered to, a point relevant for insurers in drafting and reviewing coverage terms.
The plaintiff, a labour-hire worker, brought a claim after being injured while following a task directed by the host employer.
The court found the host employer liable, assigning vicarious liability due to the coworker’s actions during an assigned task. The ruling focused on the host employer’s control over task execution and responsibility for workplace safety.
HWL Ebsworth said that this case reinforces the host employer’s obligations under labour-hire agreements, particularly in relation to maintaining safe work environments.
Host employers are reminded to clearly define roles and ensure proper coordination when using labour-hire arrangements.
