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ARTICLE · 12 AUGUST 2010

Common Meaning Of Term Of Exclusion Clause Prevented Indemnity Being Available

Norton Rose Fulbright Australia
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The global financial crisis has led to many claims being made on financial advisers by investors who have suffered losses as a result of a decrease in the value of their investments. This has in turn led many financial advisers to seek indemnity under their insurance policies for the investors’ claims.

AustraliaInsurance
Brooke Morrow
Brooke Morrow
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The global financial crisis has led to many claims being made on financial advisers by investors who have suffered losses as a result of a decrease in the value of their investments. This has in turn led many financial advisers to seek indemnity under their insurance policies for the investors' claims.

Trustees Executors Ltd (TEL) provided investment administration services and mortgage lending. TEL is trustee and manager of Tower Mortgage Plus Fund (Tower) which primarily invests in mortgages. In 2007, 16 loans involving $33 million made by TEL on behalf of Tower fell into arrears. The loans had been made by TEL outside the approved loan criteria agreed to by Tower. In response to a claim by Tower, TEL agreed to make good any losses which Tower incurred as a result of the unauthorised lending. By mid-February 2008, TEL had settled Tower's claim with its insurer's consent (QBE) (subject to a reservation of rights).

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