Abstract

In respect of Property insurance, time under a Limitation of Actions statute commences to run when the covered damage to the property occurs.  It is irrelevant that the amoount of the promised indemnity cannot be then calculated.

Article

As to whether a claim for indemnity under a Property policy is statute barred under a Limitation Act, the insured’s cause of action for damages for failure to hold it harmless against loss accrues on the happening of the insured event. That the amount cannot be calculated at the time the obligation arose does not mean that it has not accrued. In respect of a policy covering loss from property damage, absent any contrary terms, a cause of action for breach of it accrues immediately upon the happening of that property damage, at which time the insurer’s obligation to indemnify arises and is breached by its failure to provide it: Globe Church Incorporated v Allianz Australia Insurance Ltd [2019] NSWCA 27.

 

This judgment had two strong dissents, and may well require higher determination.

 

In respect of Liability insurance, it is well established that the time for indemnity does not begin to run until the insured’s liability is established by judgment, award or settlement.