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Allianz wins appeal in ‘double insurance’ lawsuit

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Lloyd’s must contribute equally to a $1.025 million injury payout that Allianz made to a road worker who was hit by a car when he was on duty.

By a 2-1 vote the NSW Court of Appeal last month struck down an earlier decision by NSW Supreme Court Justice Kelly Rees ruling in favour of Lloyd’s.

As reported in April, Allianz sought a contribution from Lloyd’s after paying the claim under a policy arranged by the Roads and Traffic Authority of NSW to cover construction risks for its contractors.

The worker was hired by a subcontractor to Baulderstone Hornibrook, which was insured in the policy as a contractor of the NSW Government agency. Baulderstone had a separate policy for public and products/contract works liability that its parent company had arranged with Lloyd’s.

The Lloyd’s policy contained a general exclusion that says it “does not cover liability which forms the subject of insurance by any other policy”. The Allianz policy included an “other insurance provision” which converted the cover against loss under the policy into excess insurance in the event that there was other “valid and collectible insurance”.

Justice Rees dismissed the Allianz case with costs in April, saying she found the cover it had issued “responds to Baulderstone’s claim whilst the Lloyd’s policy does not”.

But last month the majority of the appeal judges ruled the clauses had the effect “of cancelling each other out”, which meant Allianz was entitled to seek an equitable contribution from Lloyd’s.