Abstract

Article

Construction

Related documents must be read together, and as a whole so as to give effect where possible to all provisions: Re Media, Entertainment and Arts Alliance; ex parte The Hoyts Corporation Pty Ltd [1993] HCA 40; 178 CLR 379 at 386–387, in an harmonious construction reflective of business common sense.

 

Time of Commencement of Cover

 

The issue of the commencement of cover is ultimately a matter of construction of the contract in question: Swashplate v Liberty Mut Insce Co [2020] FCA 15. The time which determines the duration of the risk is that of the place where the contract was executed, unless it be shown that a different computation of time was contemplated: Walker v Protection Insurance Co 29 Me 317 (1849) (WL 1742, 16 Shep 317); Swashplate (supra). It would be surprising if it were otherwise.

Time of Trigger n Pollution insurance

In Pollution insurance, there may be an issue as to when the trigger is engaged: Epsilon Insurance Broking Services Pty Ltd v Liberty Managing Agency Limited (No 2) [2020] FCA 20

The Effect of Exclusions

Te effect of an exclusion is that cover according to the general insurance promise is cut or carved back to the extent of the exclusion Lake v Simmons [1927] AC 487, 507, in Malamit Pty Ltd v WFI Insurance Ltd [2017] NSWCA 162; Epsilon Insurance Broking Services Pty Ltd v Liberty Managing Agency Limited (No 2) [2020] FCA 20.

Cover of Mitigation Expenses

As to whether a policy provides cover for the insured’s costs of preventing, mitigating or rectifying property damage arising or continuing out of an occurrence, if part of the express cover concerns activity to minimise loss that was covered by the policy, then it will be covered, even in the absence of a “suing and labouring clause”: Fenton v The Queensland Insurance Company Limited (1915) 11 Tas LR 125; Emperor Goldmining Co Ltd v Switzerland General Insurance Co Ltd [1964] 1 Lloyd’s Rep 348, but if there is no cover for liability for property damage, for example, if the relevant cover is limited to liability for a penalty for pollution, no implied cover will be found, though in such circumstances it might, depending on the policy’s terms,  cover the cost of action to minimise any likely fine or penalty and the costs associated with the prosecution or defence: Epsilon Insurance Broking Services Pty Ltd v Liberty Managing Agency Limited (No 2) [2020] FCA 20. As to whether cover will ordinarily or by implication extend to steps to remediate property damage that may go towards minimisation of any liability for property damage, fine, penalty or defence costs see Vero Insurance Ltd v Australian Prestressing Services Pty Ltd [2013] NSWCA 181 at [24]–[27]; and [50]–[56]; Yorkshire Water Services Ltd v Sun Alliance & London Insurance Plc [1997] 2 Lloyd’s Rep 21 at 30 and 33; Guardian Assurance Co Ltd v Underwood Constructions Pty Ltd (1974) 48 ALJR 307 at 309; and Re Mining Technologies Australia Pty Ltd [1999] 1 Qld R 60.  Nor can such mitigation expensesbe regarded as “costs, charges, fees [or] expenses... incurred... in defending, investigating, settling or appealing any claim”: Epsilon Insurance Broking Services Pty Ltd v Liberty Managing Agency Limited (No 2) (supra).

Exclusion of Mitigation Costs

If the policy contains an exclusion as to to he actual, alleged or threatened discharge, dispersal, release, seepage, migration or escape of pollutants, except in respect of sudden escape; and as to cost and expenses incurred in the prevention of the actual, alleged or threatened discharge, dispersal, release, seepage, migration or escape of pollutants, and if it also contains a condition requiring the insured to take all reasonable precautions to prevent loss, use due diligence and at his own expense do all things reasonably practicable to avoid or diminish any covered liability from a threat of which he becomes aware, the cover does not apply to the expense of mitigation in performance of the condition: Epsilon Insurance Broking Services Pty Ltd v Liberty Managing Agency Limited (No 2) [2020] FCA 20.