Can an insurance broker renege on a proposed underwriting agency relationship after the negotiations with the underwriter are finalised but before a formal agreement is signed?

Entering into a business relationship with another party can be complicated; many issues need to be discussed and agreed to. The parties need to be free to negotiate without commitment until they reach substantial agreement. Once they do, they often engage lawyers to prepare a written contract, which they sign.

What is the position if one of the parties changes its mind before the lawyers agree to the terms of the written contract? Can that party rely on the absence of a signed contract to walk away? [Read more…]

Two recent Australian cases of interest – one overturns a PI claim declinature, the other upholds a PI claim declinature by applying the aggregation clause

Certain Underwriters at Lloyd’s v Aquagenics Pty Limited (in liquidation) (Click here for the decision)

Background

The insured (Aquagenics) was a water treatment-engineering firm. It contracted with a local council to design and build a wastewater treatment plant. It held a design and construct professional indemnity policy with Lloyd’s Syndicates. [Read more…]

English High Court considers duties of an insurance broker and whether breaches caused the insureds’ loss

A serious fire destroys a number of commercial buildings on one site. The insurers of the destroyed buildings and the destroyed plant/machinery under two separate policies elect to avoid the policies for non-disclosure/misrepresentation.

Without contesting the insurers’ decisions and determining the legal position under the policies, either by way of a settlement or a judgment, the insureds sue the insurance broker in negligence. [Read more…]

If your insurance broking business provides a FAS to retail clients, it will be a FAP and it will need to be licensed under the new Bill.

Welcome to the alphabet soup of the Financial Services Legislation Amendment Bill. This Bill if enacted will:

• Repeal the unloved Financial Advisers Act 2008,
• Amend the existing Financial Markets Conduct Act 2013 to include the new financial adviser regulatory regime, and
• Amend the Financial Service Providers (Registration and Dispute Resolution) Act 2008 to accommodate these changes and to eliminate overseas abuse of the Financial Service Providers Register.

Parliament is likely to pass the Bill into law later this year, but it will not go live until the Code of Conduct is finalised. Once it goes live, the FMA will issue transitional licences over a two-year period. After this period expires, the new regime will come into full force. [Read more…]

Can an exclusion in a liability policy that only applies to part of a claim still exclude the whole claim because of the definition of ‘Claim’ and the way the third party has pleaded its claim against the insured?

 
Background
The owners of an apartment block suffering from weather-tightness issues are suing the Napier City Council.

The owners plead in their statement of claim one cause of action only in negligence (breach of duty of care by the Council in performing its regulatory functions). In turn, they plead this led to multiple defects in the building.

Many of the defects relate to weather-tightness issues, but some do not [Read more…]