Property Claims Property Claims

Matter Examples

Property Claims

Complex Causation and Liability Issues


  • We advised on indemnity in a claim relating to a substantial retail building that had significant subsistence issues. Although no claim was made, we arranged for an expert to attend the site to measure relevant site conditions and investigate the below surface issues. We also obtained witness statements about issues with the building’s construction that arose during construction. Several years later, after the building was condemned and partly demolished, a claim was made for property damage including loss of profits of approximately $17 million. Even though the insured was the primary focus of the allegations of negligence, we settled the insured’s apportionment for only $35,000.  This was due to the early work we undertook in establishing the conditions onsite and in arranging early witness statements.


  • We acted for insurers and successfully declined a claim involving the destruction of a historical hotel by way of a fire in South Australia. As a result of our extensive investigations, retaining fire experts and liaising closely with the police, we were able to establish that the insured had probably set fire to the premises. In addition, we were able to show that the insured had grossly exaggerated its claim. This meant that we could recommend that the insurer decline the claim and, ultimately, the insured accepted this decision.

  • We acted in a number of matters where fraudulent claims were made upon motor vehicle and home contents policies, including successfully assisting in the defence of motor vehicle claims on the basis of contractual defences, such as ‘not truthful and frank’ in accordance with the principle articulated in NRMA Insurance v McCarney (1992) 7 ANZ Insurance Cases 61-146.

  • We acted on behalf of an insurer in relation to a claim made by a male and female insureds who were joint owners of the insured property, which was destroyed by fire. The insured had separated but reconciled before the fire. During the separation, the property had been transferred to the male insured. The key issue involved determining what interest the female insured had in the property, whether there was an insurable interest, and whether she was entitled to recover under the policy. We concluded that the conduct gave rise to a constructive trust, which made the insured join tenants. This precented the female insured from recovering under the policy because of the fraudulent acts of the male insured.

  • We successfully reduced the amount awarded to a defendant by arguing, as an alternative to the allegation of fraud, that, despite the residential nature of the insured property, due to the nature of the defendant’s personal circumstances, damages ought to be assessed as they would be in the case of an investment property. This led to a reduction the amount awarded to the defendant.

  • We led a successful investigation over 8 months into a $1.1 million suspicious fire claim. We gathered the evidence that proved fraudulent arson. We advised the insurers on coverage issues including non-disclosure of previous fraudulent claims and the involvement of an innocent co-insured.

Subrogated Proceedings

  • Our lawyers acted for Australia’s largest paper manufacturer in relation to subrogated proceedings whether the insured’s paper-making machine at its mill in Victoria was damaged as a result the rubber cover to a cylinder of the machine being incorrectly glued by a third party during a routine service.  As a result, the machine was damaged beyond repair and the insured paid over $12 million to the insured under the policy.


  • We acted on behalf of an insurer in relation to a claim made by the insured for jewellery he alleged was stolen from his property. The insured failed to disclose a significant prior history that would have precluded the risk being accepted. While the claim was being investigated, the insured verbally abused the insurer’s staff. At this point, we took over all communication with the insured in an effort to placate him. After investigating the claim, we recommended it be declined on the basis of non-disclosure. After much debate, the insured accepted the declinature.

  • We successfully acted for Suncorp in Rodney Michail v Australian Alliance Insurance Co Ltd [2013] QDC 284.  In this case, we successfully obtained a judgment upholding its decision to decline a claim involving the loss of a motor vehicle insured by a property policy. The insured was held to have breached his duty of disclosure under s 21 of the Insurance Contracts Act 1984 (Cth).


  • We successfully pursued a recovery on behalf of property insurers arising out of a collision between a tug boat and large Queensland coal conveyor belt. The impact caused over $500,000 in property damage, as well as significant business interruption costs. We took a proactive approach to this matter and obtained supportive expert evidence that showed that the tugboat’s crew had acted negligently and this had led to the damage to the conveyor. As a result, we were able to achieve an excellent recovery on behalf of the insurers from the tugboat operator.

  • We successfully pursued a recovery on behalf of the property insurers of a number of insureds who housed their goods in a large warehouse based in Western Sydney where a fire destroyed hundreds of thousands of dollars of furniture was being stored prior to sale. By adopting a proactive and thorough approach from the outset, we were able to present evidence that showed that the negligent actions of the tenant had caused the fire to break out in a stack of tyres near the warehouse. By commencing proceedings supported by unequivocal expert evidence, we were able to obtain a very positive commercial settlement at an early stage in the process resulting in a very positive recovery for the insurers with minimal legal fees being incurred.

  • We acted for a Lloyd’s Syndicate via an underwriting on a large loss recovery totalling $750,000 for a league club that resulted from a fire in a sub-lessee’s commercial kitchen. The recovery involved a number of complex issues arising from the responsibility to maintain the kitchen and, in particular, the responsibility to maintain the kitchen and the kitchen’s exhaust system. The key question in the case was whether responsibility ultimately rested with the sub-lessee, the club or its landlord.

Multiple Complex Legal Issues

  • We advised a Lloyd’s Syndicate on an indemnity dispute arising out of a $55 million property damage claim relating to a large civil construction project. The joint venture that had been contracted to provide labour and excavation services made a claim for coverage. The claim raised a number of complex legal issues, including the complex interface of insurance regimes, the relevant obligations arising from the joint venture agreement and the potential for coverage under a number of different liability policies.


Class Actions

  • Our lawyers advised an international insurer in the Esso class action arising out of the Longford Gas explosion, which affected the gas supply to millions of Victorian households. They advised on:

  • Operation of the class actions in Victoria
  • Complex issues of pure economic loss
  • Exposure amount (which could have exceeded $500 million).

Cyclone Claims
  • Following Cyclone Larry, we acted for an insurer in relation to a claim regarding major loss to a manufacturing shed in Northern Queensland. The key issue related to the adequacy of repairs and policy response as a result of subsequent damage in 2013 to the premises’ roof. The policy contained a gradual deterioration exclusion. Despite pressure from the insured’s broker and some media interest, our client insurer maintained our recommendation and denied the claim.

  • We advised an insurer client in relation to claims arising out of damage suffered by sub-sea assets and an off-shore mobile drilling platform off the coast of Western Australia as a result of the impact of Cyclone Olwyn. Faced with significant potential business interruption costs and with repairs involving the use of specialised equipment costing approximately $1 million per day to hire, it was necessary to adopt a proactive approach with the insurer to monitor costs and develop strategies to ensure that the assets were repaired and on-line again in the most efficient manner possible. By using this approach, we saved the insurer several million dollars.

Fire Damage Claims
  • We acted on behalf of an insurer in relation to a claim made by an insured following a fire at a large commercial premises. The policy contained a co-insurance clause that provided an averaging formula. The insured contested the application of the co-insurance clause and alleged breaches of the contract, as well as the duty of good faith. We defended the claims and encouraged the parties to attend a mediation. As a result of the arguments raised by us at the mediation, the claim settled shortly after the mediation for a sum within reserve.

  • We acted as coverage counsel for London- and Australian-based insurers regarding a fire damage claim at a major construction site in the Sydney CBD. The claim involved complicated issues arising from the operation of exclusions and memorandum in sections 1 and 2 of a contracts works policy. By engaging investigators, loss adjusters and other experts (quantity surveyors and experts in business interruption) early in the process, we were able to assess the insurers realistic exposure to the claim and work towards agreeing the scope of the insurer’s exposure under the policy.

  • We acted for the insurers of a wind farm in a remote part of South Australia. The wind farm suffered extensive damage as a result of fire, allegedly caused by a faulty transformer in one of the wind towers. Both the wind farm and the operators of the wind farm sough indemnity under the underwriter’s policy for losses sustained. Initially, we resolved the claim of the owner of the wind farm, who were clearly entitled to indemnity under the underwriter’s policy, on best terms. However, we then declined indemnity to the operator of the wind farm on the basis that they did not have an insurable interest under the policy and used the strength of that position to negotiate an extremely economical settlement of the claim by the operator of the wind farm.  Having reserved all recovery rights, we then pursued a recovery action against the manufacturers of the allegedly defective transformer. After protracted litigation, we negotiated a settlement following an aborted mediation recovering all monies paid by the insurers in resolution of the claim of the wind farm owners and operators (plus interest).  In total, the underwriters paid out $2 million but recovered $3 million in the recovery action.

  • We acted for a mining company in relation to a major business interruption loss claim arising from the fire in a SX plant at the mine site. It was the second such fire. The insurers sought to resolve the claim on the basis of a ‘like for like’ replacement of the SX plant. We argued for the mining company that, as it was the second fire, the regulatory requirements to provide a safe plant, they were required to reinstate with significantly enhanced fire protection systems. Obviously, this mean significantly increased reinstatement costs. Reinstatement on a ‘like for like’ basis was at a cost of approximately $80 million. The cost of reinstatement with substantially enhanced fire protection systems was in the order of $300 million. We negotiated a settlement at mediation for $220 million. It is worth noting that, prior to our appointment, the mining company had indicated an intention to resolve the claim for $80 million. However, the legal issues we raised regarding the reinstatement clause led to us achieving a much better outcome for the mining company.

  • We acted on behalf of an insurer in relating to a claim made by an insured following a fire at a large premises. The policy containing a co-insurance clause that provided an averaging formula. The insured contested the application of the co-insurance clause, alleging breaches of the contract and the duty of good faith. We defended the claim and pressed the parties to mediate. As a result of the arguments we raised at mediation, the claim settled shortly after for a sum within reserve.

  • We acted for the insurer of a strata titled commercial property destroyed by fire, which was exposed to a total loss. By carefully reviewing the expert evidence, we established that the cause of the fire was due to a defective paint mixer on the premises. Since the operation of the pain mixer was being performed negligently, we were able to successfully pursue recovery from its operator.

  • We acted for an insurer of a shopping centre in which a small supermarket was situated. A fire started in the supermarket as a result of an electrical fault induced by compression damage to a cord extension socket in a commercial chest freezer. The insured’s building and contents were damaged by the fire and the insurer paid rectification costs in the vicinity of $2 million. The insurer then sought recovery of this amount from the operator of the supermarket on the basis that it had caused the damage to the electrical socket that caused to the fire. One of the key issues was liability and the supermarket operator’s insurer took a very strong stance on liability, almost to the point of trial. Although we took the view that the prospects of successfully pursuing the recovery action were not high, enough expert evidence and an aggressive approach to the litigation resulted in the defendant’s insurer paying approximately 50% of the claimed amount. We regarded this as an excellent result in circumstances where the chances of succeeding at trial were significantly less than 50%.

Flood Claims
  • Immediately after the Brisbane Floods in 2011, we were appointed by a major insurer to manage their claims. We immediately formed a dedicated ‘flood team’ that comprised a senior partner and three senior associates.They prepared hundreds of advices, including complex policy-specific issues relating to hydrological and proximate cause issues. They also were seconded on a short-term basis to the internal dispute resolution team. Later on, we managed a large number of litigated claims and managed the media relationship issues associated with the claims. The support we provided our client insurer during this difficult period insured that it emerged from the event with an enhanced reputation.
  • We acted on behalf of a domestic insurer in a claim arising from the destruction by flood of property belonging to a high-net-worth policy holder. The policy contained a flood exclusion but the cause of the damage was in dispute. By conducting early investigations, we were able to negotiate a cost-effective resolution to the matter for our client.

Hail Damage Claims
  • A glass manufacturer in southern Queensland sustained significant hail damage. The claim involved an Industrial Special Risks (ISR) policy dispute involving business interruption. A close review of the proposal showed misrepresentation as to the nature of the property being insured. There was sufficient evidence to establish fraud on the part of the insured and we relied on s 56 of the Insurance Contracts Act 1984 (Cth) to enable our client insurer to avoid the policy without payment by our client insurer.


We advised an insurer on a claim arising from a landslip following excavation works. The landslip caused damaged to constructions works that were in progress. We gathered aerial evidence of site conditions prior to the landslip and used photographs to determine what works had been undertaken by which parties. We joined concurrent wrongdoers and agreed apportionment with them at an informal conference. In addition, we identified elements of exaggeration in the claimant’s claim and reduced the quantum.

Legal Issues

Dual Insurance

  • We advised an insurer on issues relating to dual insurance, as well as the interaction of a contract works policy and a property policy. In the context of this claims, we devised a strategy that enabled us to resolve in our client’s favour a dispute between two insurers over whose policy covered losses resulting from a fire at a large heritage building.
  • We managed on behalf of an insurer a claim for entitled to contribution from another insurer for dual insurance in relation to loss to industrial machinery. The dispute was referred to mediation and this was converted into an appraisal by the mediator. The appraisal was successful from our client’s perspective.

Swift Adjustment

  • We advised a market of Australian-, London- and Swiss-based insurers in relation to a major loss during the construction of a Victorian highway. The insured alleged that unseasonably high levels of rainfall resulting from a double La Nina weather event caused enormous quantities of fill that was originally intended to be used on the project to become unusable. The claim was initially put at in excess of $240 million. By working closely with a team of expert adjusters, meteorologists, geotechnical experts and expert project managers, we were able to establish that the legitimate (and covered) quantum of the claim was around $20 million. Ultimately, the matter was able to be resolved with a settlement that represented an excellent commercial result for the insurers and savings for the market in excess of $200 million.

Basis of Settlement

  • We acted for an insurer facing a multi-million dollar claim in relation to commercial premises. The claim raised many difficult issues including whether the insured was going to reinstate and, as a result, whether the basis of settlement was indemnity or reinstatement. In collaboration with an experienced loss adjuster and other experts, we managed the matter. Ultimately, we resolved it on terms that included an initial payment having regard to indemnity and a subsequent payment upon re-instatement. The subsequent payment was never made by the insurer as reinstatement never took place.


  • We assisted in providing overage advice to an Australian insurer regarding an insured’s claim for indemnity under its annual contract and works and plant and equipment floater policy arising from proceedings relating to the construction work carried out to a community pool in Camden.

  • We advised a large international insurer regarding coverage issues following a multi-million dollar business interruption loss at a power station in Jordan and a multi-million dollar loss at a power station in Panama. Both matters involved considering choice of law and jurisdiction issues. We were able to resolve the matter promptly by adopting a collaborative approach with both the insured and insurer, as well as the locally appointed solicitors.

  • We provided coverage advice to London and Australian-based contact works insurers regarding a claim by its insured regarding over $50 million damage to cable join bays at a desalination plant in Victoria.

  • Our lawyers advised on a $10 million claim in relation to a diesel spill in Antarctica. They advised on policy interpretation, which included reviewing historical underwriting documents and interviewing underwriting witnesses in relation to the development of the scheme 12 years earlier. They also advised on statute of limitation issues. They defended the claim in the Federal Court of Australia and the claimant was ordered to pay the insurer’s costs. The claimant appealed to the High Court where our lawyers were successful and obtained an enforced costs order for the client.

  • We acted on behalf of an insurer in relation to a claim made by owners of a house constructed on a ‘cut and fill’ block of land. The fill was constructed as an earth bank but did not support the house structure. The earth bank slipped. The insured alleged that the householder’s policy responded to indemnify them for the cost of replacing the earth fill, which was very expensive. We successfully argued that the earth bank did not fall within the definition of ‘your home’.


Total loss of residential premises

  • We advised an underwriter regarding policy response for the total loss of a residential premises being purchased by the insured (prior to completion). As the risk in the policy had not passed, the requisite insurable interest under the insurance contact did not exist and the policy did not respond.

Property damage resulting from construction works

  • We acted for Lloyd’s Syndicate on a $8 million claim by a strata manager for property damage caused to a heritage-listed hotel situated on a strata property arising from movement to a shoring wall constructed on an adjoining property. The claim involved a number of contributing technical factors that caused the wall to move.

Offshore mobile drilling rig

  • We advised an insurer on issues relating to policy coverage and claims/quantum management in relation to damage caused to a mobile drilling rig and sub-sea LNG assets, along with a potential business interruption claims following the shut down of a Western Australian LNG plant. By investigating the facts closely and liaising with the insured throughout the process, we were able to identify the cause of the damage and quantify the policy response. This meant that we shortened the tail of the claim and contained costs for our client.

Explosion at gas plant

  • We advised an insurer client in relation to the applicability of exclusions in a broker manuscript policy relating to a gas plant. An explosion caused significant damage. The cause of the explosion was an issue but, following high priority investigations, cover was extended to the insured and negotiations undertaken to import parts of the plant to minimise future business interruption and loss. The saving to our client was greater than $5 million.

Electricity price risk insurance

  • We provided advice on the re-insurers’ wording regulating a conditional electricity price risk insurance policy. The cover was specifically designed to provide business interruption protection to the electricity providers. It was triggered by a the occurrence of an unplanned outage or derating along with a spike in the electricity market price. The response was capped with reference to the number of hours lost, price and usage.

Malicious damage to vehicles overseas

We provided coverage advice to an insurer whose insured was an Australian company that leased large earthmoving equipment to various companies within the mining and construction sectors, including overseas operations.

Large mining equipment was leased to a mine operator in New Caledonia.

Disgruntled locals upset about the impact of the mine on their community of that equipment damaged some of that equipment. Some of the equipment was unable to be repaired and other items were written off leading to a loss of revenue for the insured.

The case involved examining certain phrases used in the policy, including whether there had been:

  • ‘unforeseen and sudden physical loss’
  • ‘breakage or derangement’ such as to evoke an exclusion
  • loss caused by ‘war, invasion, hostilities… persons acting on behalf of or in connection with any political organisation…’.

The claims also involved a consideration of s 45 of the Insurance Contracts Act 1984 (Cth) in relation to a policy taken out by the overseas mine operator.

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