In this practice area
Disputes where two or more policies may respond to the same loss, and each insurer points to the other through other insurance clauses or contribution arguments.
When double insurance arises
Double insurance arises when the same insured holds more than one policy covering the same loss. It is common in commercial settings: a company's own public liability policy and a principal's project policy that names it as an insured, a management liability package and a standalone directors and officers policy, or two property policies over the same premises. It also arises across a renewal, where one insurer says a claim belongs to the prior year and the other disagrees.
In practice the insured is often caught between insurers, each relying on an other insurance clause to say that it pays only after the other, or only its share. The claim then stalls while the insurers argue among themselves.
The legal framework
The Insurance Contracts Act 1984 (Cth) addresses this in two ways. Section 45 makes void a provision in a general insurance contract that limits or excludes the insurer's liability because the insured has entered into another contract of insurance, subject to exceptions, including a policy written expressly as excess over another specified contract. The section is directed at other insurance that the insured itself has taken out, and its application depends on who entered into the other policy.
Section 76 provides that where two or more insurers are liable under separate contracts of general insurance to the same insured for the same loss, the insured may recover immediately from any one or more of them the amount needed to indemnify it fully, up to each policy's sum insured and the total loss. The insurers' rights of contribution between themselves are preserved. Those contribution rights come from equity, and the High Court's decision in Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 remains central to how contribution is calculated.
How these matters run
The first step is to identify every policy that might respond, including policies held by other parties that name the insured, and to notify each insurer promptly. Delay while insurers argue can itself create notification problems.
The insured should then press the insurer best placed to respond for full indemnity under section 76, leaving contribution to be sorted out between insurers. Where they will not agree, proceedings can join all relevant insurers so that the court decides liability in one hearing.
How GopherWood Lawyers acts
We map the policies, test each other insurance and excess clause against section 45, and identify which insurer the insured should pursue first. Our aim is to keep the insured out of the contribution dispute and get the claim paid.
Where insurers will not resolve it, we commence proceedings against the relevant insurers together and seek interest for the delay.