Reasonable care and recklessness in insurance policies – proceed with caution!Author : Claire MacMillan and Thomas O'Connor

General Insurance

The anticipated NSW Court of Appeal decision of Barrie Toepfer Earthmoving and Land Management Pty Ltd v CGU Insurance Ltd [2016] NSWCA 67 highlights the current approach to insurance policy interpretation. Policies are read as commercial contracts and a businesslike interpretation should be applied to policy terms.

The Court of Appeal also examined recklessness and concluded that recklessness requires evidence that a particular risk was known and that there was a failure to take reasonable steps to avoid it and thereby avoid damage.

Claire MacMillan (Special Counsel) and Thomas O’Connor (Solicitor) consider the decision which provides useful guidance on the construction and application of conditions and exclusions in an insurance policy. Click on the link below to read the full update.