Double insurance and section 45 Insurance Contracts Act

Double insurance, double the fun? Double insurance and section 45 ICA

The High Court's decision in Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd [2009] HCA 50 gives valuable guidance to the operation of section 45 of the Insurance Contracts Act and the liability of insurers when two policies apply to one loss - that is, double insurance. It's a particularly important decision if you require your suppliers to take out insurance naming you as the insured.

The contract, the indemnity, and the double insurance Speno entered into a contract with Hamersley to perform certain services for Hamersley. Part of the deal required Speno to indemnify Hamersley for any common-law claims for personal injury to Speno's employees engaged in contract works, and any liability arising from the performance of the works. Speno also had to arrange liability insurance to cover Hamersley's interest as a principal.

Speno took out insurance with Zurich, naming Hamersley as the insured. Hamersley then took out its own insurance...