Key Points:
Contracts of insurance attract a unique set of
principles of interpretation, and are subject to a comprehensive
regulatory regime.
Characterising a contract as one of insurance has significant
consequences. Among other things, the contract will be subject to a
comprehensive regulatory regime, its operation and effect may be
altered by legislation such as the Insurance Contracts Act 1984
(Cth), the insurer under the contract must be authorised to enter
into it and, in the event of a dispute over the terms of the
contract, it will be interpreted in accordance with a set of
principles which may not apply to other contracts.
Despite these consequences, the difference between a contract of
insurance and other contracts of indemnity is not always apparent
on the face of the document itself. Sometimes you need to consider
the circumstances in which the contract is formed. Even then, there
may still be some uncertainty as to the proper characterisation
