Dual Insurance

Did you know: Subrogated recovery against a third party isn’t your only potential recovery path. There may be another insurance policy that covers your insured for their loss. In other words, there may be dual insurance!

Dual insurance exists where, at the time of the loss, two or more legally enforceable policies cover the same interest in the same subject matter against the same risk.

When determining whether the same interest has been insured, don’t worry about the nature of the claim made by the insured. Instead look at the straightforward question of whether two policies cover the same loss.

Where there is dual insurance, if you have indemnified your insured already, this gives you the right to seek contribution from the other insurer. Happy days!

There doesn’t have to be any similarity between the relevant insurance contracts regarding their general nature, or purpose, or the extent of the rights and obligations they create. What matters is simply that each contract is a contract of indemnity and covers the identical loss that the identical insured has sustained.

The right to contribution is:

… founded on concepts of fairness and justice… In this context, “natural justice”  requires that if “one of several persons has paid more than his proper share towards discharging a common obligation he is entitled to be recompensed by those who have not.” Burke v LFOT Pty Ltd [2002] HCA 17 at [22]

Examples of where they may be dual insurance include:

  1. Contract works – there are many parties to a project (Principal, head-contractor, sub-contractors, etc) and there are frequently a number of insurance policies floating around. Note: look carefully at whether there is a subrogated claim first;


  1. Motor accidents – where one or more of the parties were driving in the course of their employment;


  1. Fire claims.

And so – don’t write off recovery just yet. Have a think about whether there may be dual insurance!


About me (Brian Silva) – I lead our Insurance Team. I was born in the Turks and Caicos Islands (West Indies), come from a Sri Lankan background, but sadly despite that pedigree am not any good at cricket!

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