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ARTICLE · 10 DECEMBER 2025

Insuring the unintended: How ambiguous wording can shift the risk landscape

Gilchrist Connell
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Recent judgment serves as a salient reminder to insurers of the importance of clear & unambiguous policy wording.

AustraliaInsurance
Melissa Fenton
Melissa Fenton
Shayma Sorefan
Shayma Sorefan
Olivia Giacomelli
Olivia Giacomelli
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On 17 October 2025, the Western Australian Court of Appeal handed down its decision in AAI Limited trading as GIO v Pilbara Iron Company (Services) Pty Ltd [2025] WASCA 150, reinforcing the legal principles governing labour hire arrangements.

The judgment underscores the judiciary's increasing willingness to recognise the transferability of vicarious liability to host employers. The judgment also serves as a salient reminder to insurers of the importance of clear and unambiguous policy wording, particularly where indemnity provisions extend to common law liability. In such cases, insurers may find themselves exposed to substantial indemnity obligations irrespective of whether the principal's liability is direct or vicarious.

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