AAI Limited t/as Vero Insurance v Geo Group Australia Pty Limited

AAI Limited trading as Vero Insurance (Vero) appealed a decision concerning an insurance claim brought by Geo Group Australia Pty Limited (Geo Group), the operator of a correctional centre. The dispute arose from Geo Group's liability for the death of an inmate who died by suicide. Vero had denied indemnity under its policy, arguing that the claim did not fall within the terms of the policy. The appeal was heard by Macfarlan, Simpson and Payne JJA of the Court of Appeal of the Supreme Court of New South Wales.

The central legal issue before the Court of Appeal was whether Geo Group's liability for the inmate's death by suicide was covered by the insurance policy issued by Vero. Specifically, the court had to determine if the failure to assess the inmate for the risk of self-harm constituted an event or circumstance that fell within the scope of the policy's indemnity.

The Court of Appeal dismissed Vero's appeal, upholding the primary judge's decision. The court reasoned that the policy's wording, when construed in its commercial context, did not exclude liability for the consequences of a failure to conduct a risk assessment, even if that failure contributed to the inmate's death. The principles applied focused on the proper construction of insurance policy terms and the extent of indemnity provided, particularly in relation to operational failures within a correctional facility. The court found that the claim was not excluded by any specific policy wording and therefore fell within the scope of the indemnity.

Consequently, the appeal was dismissed, and Vero was ordered to pay the respondent's costs.