Third Party Claim Against Liability Insurers

Under s601AG of the Australian Corporations Act 2001, a third party may recover directly from the liability insurer of a deregistered company where the company was liable and the insurance contract covered the liability immediately before the deregistration.

WFI insurance denied the Plaintiff's claim¹, which arose out of negligent shopfitting work undertaken by the (by now deregistered) insured, on the grounds that the insured was not liable for the alleged loss and damage, that the insured had been in breach of a policy condition (precedent) requiring compliance with plumbing standards Regulations, and that the claim fell foul of a Products exclusion and/or a Workmanship exclusion in the policy. The insured was found to be liable, the first two policy defences failed wholly and the workmanship defence partially succeeded.