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ARTICLE · 23 JANUARY 2013

Brokers' duty to advise on sub-limits in insurance policies

DLA Piper Australia
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Brokers must understand the operation of sub-limits in their policies and the appropriateness to their client's needs.

AustraliaInsurance
Andrew Sharpe
Andrew Sharpe

Strategic Property Holdings No.3 Pty Ltd v Austbrokers RWA Pty Ltd [2012] NSWSC 1570

Strategic Property Holdings (Strategic) owned significant property assets, including a property in the ACT which was leased to the Commonwealth and used by the Australian Defence Academy (the ADA Property). The Broker was retained by Strategic and its property and investment manager (Eclipse) to arrange insurance for Strategic's property assets, including the ADA Property.

In 2005, the Broker arranged an Industrial Special Risk (ISR) policy with Suncorp. The ISR policy:

  • Was a 'master policy' covering all properties owned by Strategic, each of which were specifically declared in a Schedule of Assets. The declared value of all property insured was $128.8 million

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