Baralaba Coal Company Pty Ltd v AAI Ltd trading as Vero Insurance

The matter of Baralaba Coal Company Pty Ltd and Wonbindi Coal Company Pty Ltd v AAI Ltd trading as Vero Insurance and others was heard in the Federal Court of Australia. The applicants, Baralaba and Wonbindi (collectively referred to as “Baralaba”), sought to be indemnified under an Industrial Special Risks Policy for damage to a radial stacker caused by a storm and subsequent collapse. The insurers, AAI Ltd trading as Vero Insurance, QBE Insurance (Australia) Limited, Starr International Insurance (Singapore) Pte. Ltd, and Zurich Insurance Australia, denied any obligation to indemnify for the damage sustained during the repairs and after the expiry of the policy. The central legal issue in this case was the extent of the insurers' obligation to indemnify under the policy. Specifically, the court had to determine whether the insurers were liable for the damage caused by the collapse of the radial stacker after the policy period had expired. The court found that the release signed by Baralaba on 1 June 2020 did not apply to the claim for the damage caused by the stacker’s collapse on 27 October 2019, as it occurred outside the period of insurance. Consequently, the court granted declaratory relief in favour of Baralaba, confirming their entitlement to seek indemnity for the damage sustained after the policy period had expired. The parties were directed to be heard further on the question of costs and interest if the claim in that respect was persisted with. The court ordered the respondents to pay the applicants' costs of the proceedings to be taxed.