Court Ruling Shows Why Overlapping Site Cover Still Needs Scrutiny

The dispute followed an incident at a Brighton, Victoria building project, where a site gate associated with subcontractor Built Tech Hoardings fell and seriously injured a traffic controller. Built Tech held its own public and products liability policy with Allianz. AIG separately insured the broader Icon group under an annual public liability programme that also extended to certain subcontractors and project parties. Allianz indemnified Built Tech for settlements and defence costs totalling more than $1.68 million, then sought a contribution from AIG on the basis that there was overlapping insurance.

The Federal Court found that AIG did not have to contribute. The outcome turned on the wording of AIG’s policy, particularly a difference in conditions or other insurance clause. Although parts of the drafting were found to be imperfect, the court construed the clause as meaning AIG’s cover would operate only as excess cover where another policy had already responded. In practical terms, Allianz’s policy was the one that answered the claim, so there was no concurrent primary cover requiring AIG to share the loss.

For Australian tradies, the lesson is not that project-wide cover has no value. Rather, it is that layered insurance can be technical. A subcontractor may be required by contract to hold its own public liability insurance, may also be an insured party under a principal’s policy, and may still face questions about which insurer responds first, what exclusions apply, and whether a project policy is primary, excess or limited to particular interests.

Before starting higher-risk work, trade businesses may wish to check several practical points:

• whether the contract requires specific limits, endorsements or evidence of cover;
• whether any head contractor or principal-arranged policy actually names or extends to subcontractors;
• how “other insurance”, “difference in conditions” and non-contribution clauses are worded;
• whether injuries to other site workers, property damage, completed works and subcontracted tasks are treated differently;
• what notification steps are required if an incident occurs.

The ruling is also a timely reminder that insurance disputes often arise after the urgent safety and claims issues have already begun. Clear records, contract documents, certificates of currency and copies of relevant policy schedules can make it easier to understand the insurance position if a serious incident occurs. This is general information only, but it shows why policy wording deserves attention well before a claim tests it.