Allianz Insurance Co Ltd v Kemcon Pty Ltd

Allianz Insurance Co Ltd (Allianz) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales which had found in favour of Kemcon Pty Ltd (Kemcon). The dispute concerned a claim made by Kemcon under a policy of insurance issued by Allianz, following damage to a building under construction.

The primary legal issue before the Court of Appeal was whether the damage to the building, which occurred during the demolition of an adjacent structure, was covered by the policy. Specifically, the court had to determine the proper construction of the policy wording, particularly in relation to exclusions and the definition of "damage."

The Court of Appeal held that the policy did not cover the damage suffered by Kemcon. The court reasoned that the damage was not a direct consequence of an insured peril but rather an indirect result of the demolition works undertaken by a third party. The policy's exclusions, which related to damage caused by or in connection with demolition, were found to be applicable. The court applied principles of contractual interpretation, emphasizing that insurance policies are to be read as a whole and that exclusions must be given their plain meaning.

Consequently, the appeal was allowed, and the orders of the Supreme Court were set aside.