ARTICLE · 29 MARCH 2016

Australian Insurance Law Update: Lessons From Todd v Alterra

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Interpreting insurance contracts is often contentious as coverage and exclusion clauses contain varying degrees of ambiguity.

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Matthew Pokarier

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Interpreting insurance contracts is often contentious as coverage and exclusion clauses contain varying degrees of ambiguity. The case of Todd v Alterra at Lloyds Ltd (on behalf of the underwriting members of Syndicate 1400) ¹ (Todd) considered whether a professional indemnity policy responded to cover losses suffered as a result of financial advice given for products not on an insured's Approved Products List.

Overview and lessons for insurers

In summary the court:

did not accept that the words "approved investments products" used in a coverage and exclusion clause meant only those investments contained in a licensees' Approved Product List.
considered the word "Encompassing" meant "containing" rather than "including", limiting the activities covered by the Policy to advice given on approved investment products and life insurance products.

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