King & Wood Mallesons

Asia-Pacific 100 position: 2

Interpreting and construing insurance policies: dewatering a pond is not as simple as it seems

In April 2012, the respondents successfully recovered $361,608.75 from the appellant for costs incurred in preventing a cofferdam wall from collapsing at a construction site due to heavy rainfall. The respondents had been contracted by the Department of Public Works and Services to undertake construction works at Centennial Parklands under insurance provided by the appellant. After heavy rainfall in 2003, the respondents were forced to pump and divert water from the site to prevent the cofferdam wall from collapsing and flooding adjoining areas.

The respondents made a claim under their insurance policy to recover the costs incurred in taking these steps but the appellants argued that the costs fell under an exclusion clause for ‘dewatering’ operations. The primary judge held that the exclusion clause did not apply and that the respondents were entitled to an indemnity under the policy. The appellant appealed this judgment in Vero Insurance Ltd v Australian Prestressing Services Pty Ltd [2013] NSWCA 181 but only secured a reduction in the liability payable…

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