ARTICLE · 22 JUNE 2012

Product Liability: PI exclusions in PL insurance to be read narrowly

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A discussion of CGU Insurance Limited v Major Engineering Pty Ltd [2012] HCATrans 69.

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CGU Insurance Limited v Major Engineering Pty Ltd [2012] HCATrans 69

Major Engineering Pty Limited (Major) held a broadform liability policy with CGU which provided public and product liability cover and an additional benefits extension providing cover for certain legal costs. Major sought indemnity under the policy for a claim brought against it by Timelink Pacific Pty Ltd (Timelink).

Timelink's claim for damages arose out of the failure of two hydraulic cylinders supplied by Major and fitted to the keel of the 'Skandia' during the 2004 Sydney to Hobart yacht race. This caused the yacht to capsize. The crew had to abandon the yacht and considerable loss and damage were caused to the yacht.

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