Key Points
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Queensland judge considers “occurrence” for the purpose of a Zurich liability policy.
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It may not always be obvious what the occurrence is.
A recent decision of the Supreme Court of Queensland explored what event constituted an occurrence for the purpose of a liability policy.
In event based liability policies it is too easy sometimes to assume that there has been an occurrence or to not pay proper regard to what the occurrence might be.
In Bigby v Kondra and Zurich [2017] QSC 37 Daubney J of the Supreme Court of Queensland had to wrestle with what the occurrence was.
The plaintiffs’ home was severely damaged in a storm. The windows were improperly installed with the result that, during the storm, the windows catastrophically failed under the stress of the atmospheric pressure change, ‘exploding’ part of the house outwards. The plaintiffs sued the builder. The builder was insured under a Business Insurance liability policy with Zurich.
The builder was found liable to the plaintiffs in negligence for failing to adequately supervise the construction of the house.
For the primary insuring clause to operate, there had to be, among other things, property damage happening as result of an occurrence in connection with the builder’s business or product.
Zurich’s main defence to the builder’s claim for indemnity was that the occurrence was the storm and that that occurrence was not in connection with the builder’s business.
Interestingly, the judge found that it was not the storm itself which caused the damage nor was it the faultily installed windows themselves. The judge found that the event which directly did the damage was an over pressurisation event during the course of the storm. In finding that the policy responded, the judge pointed out that that event did not occur in isolation and because it “… was caused to occur, by the failure of the defectively installed windows” and that the installation of those windows was part of the builder’s business, there was therefore an occurrence in connection with the builder’s business.
Post by Paul Hendriks