Swashplate v Liberty Mutual
- David Hallows
- Sep 28, 2020
- 2 min read
Sept 28 2020 -
Swashplate Pty Ltd v Liberty Mutual Insurance Co: An Update.
London 28th September 2020 – the Full Federal Court’s decision
In a recent article, Pre-risk Proximate Causes, we highlighted a potential exposure for claimants in the event of a proximate cause taking place prior to the commencement of coverage and the effect, in the form of physical damage, not being felt until after cover had commenced.
We highlighted the importance of clarity in policy terminology in order to avoid any gaps in coverage. The article cited a decision earlier this year when a claimant under a marine insurance policy was denied coverage on the basis that the proximate cause of loss took place prior to the attachment of the insurance. The case being Swashplate Pty Ltd v Liberty Mutual Insurance Co ([2020] FCA 15).
The aforementioned judgment was appealed and on 13th August 2020 the Full Federal Court overturned the court of first instance decision and found underwriters to be liable to indemnify the Assured. The Full Federal Court’s interpretation of the terminology of the insurance contract being that the proximate cause did take place during the currency of the policy.
The very fact that the case went to court, with the court of first instance’s decision being successfully appealed, highlights the fact that clarity of policy terminology is essential. In this respect, the specific observations we make in our Pre-risk Proximate Causes article stand, with regards to oil & gas construction, operational and decommissioning insurance contracts and the need for clarity regarding coverage for pre-risk proximate causes.
About Trident Oil & Gas Claims Consultants Limited: Trident specialise in providing insurance coverage advice to policyholders from within the oil & gas industry. In particular, Trident offer advice and representation during the preparation, negotiation and settlement of insurance claims. Trident’s experience encompasses exploration, construction and operational risks. www.tridentclaims.co.uk
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