Insurers Must Prove Limits of Liability
In a groundbreaking decision, the High Court of Australia ruled on 30 March 2010 that where the details of an insurance policy were no longer known, it is the insurer’s responsibility to prove the limits of that policy.
Wallaby Grip Limited v QBE Insurance (Australia) Limited [2010] HCA 9 – High Court decision delivered 30 March 2010
The widow of an asbestos victim made an insurance claim in light of her husband’s death from mesothelioma. Her husband had been employed in the 1960’s by Pilkington Bros (Australia) Pty Ltd and was exposed to asbestos fibres in the course of his work, mainly through the use of gloves manufactured by the plaintiff, Wallaby Grip Limited.
The widow took Pilkington’s insurer, QBE, and Wallaby Grip to the Dust Diseases Tribunal and was awarded $365,000 after findings that both were negligent. This decision was subsequently overturned in the New South Wales Court of Appeal, which ruled that QBE’s liability was limited to the statutory minimum of $40,000 because the insurance contract covering the deceased had been lost and its terms could not be known.
The High Court of Australia overturned the Court of Appeal’s decision and restored the full payment to the widow.
The court found that the deceased’s widow bore the onus of proving her husband was insured by QBE, that his injuries had been caused in the course of his employment with Pilkington and that she had suffered loss. However, she was not also obliged to prove that the contracted insurance covered her for the full amount of her loss.
Instead, the High Court ruled that if an insurer alleged its liability was capped, it was also responsible for proving what the limits of its liability were.
The High Court found this was consistent with the intention of the applicable Workers’ Compensation Act 1926 (NSW), which governed the deceased’s employment at the time of the injury. The intention of that legislation was to facilitate claims against insurers, rather than to “create obstacles to recovery”.
To download a full text of the decision click here.
Not on our emai list? Click here to subscribe and receive these e-alerts plus more from Elevista!
Wallaby Grip Limited v QBE Insurance (Australia) Limited [2010] HCA 9 – High Court decision delivered 30 March 2010
Facts
The widow of an asbestos victim made an insurance claim in light of her husband’s death from mesothelioma. Her husband had been employed in the 1960’s by Pilkington Bros (Australia) Pty Ltd and was exposed to asbestos fibres in the course of his work, mainly through the use of gloves manufactured by the plaintiff, Wallaby Grip Limited.
The widow took Pilkington’s insurer, QBE, and Wallaby Grip to the Dust Diseases Tribunal and was awarded $365,000 after findings that both were negligent. This decision was subsequently overturned in the New South Wales Court of Appeal, which ruled that QBE’s liability was limited to the statutory minimum of $40,000 because the insurance contract covering the deceased had been lost and its terms could not be known.
Decision
The High Court of Australia overturned the Court of Appeal’s decision and restored the full payment to the widow.
The court found that the deceased’s widow bore the onus of proving her husband was insured by QBE, that his injuries had been caused in the course of his employment with Pilkington and that she had suffered loss. However, she was not also obliged to prove that the contracted insurance covered her for the full amount of her loss.
Instead, the High Court ruled that if an insurer alleged its liability was capped, it was also responsible for proving what the limits of its liability were.
The High Court found this was consistent with the intention of the applicable Workers’ Compensation Act 1926 (NSW), which governed the deceased’s employment at the time of the injury. The intention of that legislation was to facilitate claims against insurers, rather than to “create obstacles to recovery”.
To download a full text of the decision click here.
Not on our emai list? Click here to subscribe and receive these e-alerts plus more from Elevista!