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Double insurance + other insurance clause November 8, 2019

Allianz Australia Insurance Ltd v Certain Underwriters at Lloyd’s of London Subscribing to Policy Number B105809GCOM0430 [2019] NSWCA 271

3. The approach to the question raised in the present case was set out by Payne JA in Lambert Leasing Inc v QBE Insurance (Australia) Ltd (2016) 93 NSWLR 166; [2016] NSWCA 254 at [178], namely, that each policy is to be construed independently and “if each [insurer] would be liable but for the existence of the other [policy], then the exclusions would be treated as cancelling each other out, both insurers are then liable” and “the one who pays can claim contribution from the other”: Weddell v Road Transport and General Insurance Company Ltd [1932] 2 KB 563 at 567 (‘Weddell’).

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6. It is important in that context to bear in mind that the words used in the Lloyd’s policy are “forms the subject of insurance by any other policy” rather than words such as “which is the subject of indemnity under any other policy”. The clause looks to the existence of a policy which covers the claim rather than whether the insured can actually obtain indemnity under it.

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12. In these circumstances, the effect of cl 10.5 of the Lloyd’s policy and cl 8.20 of the Allianz policy is to deny liability under each policy because of the existence of the other. Applying the rule of construction in Weddell, the clauses cancel each other out with the result that both policies respond and Allianz, having met the claim, is entitled to contribution from Lloyd’s.

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