BOQ Ltd v Chartis Aust Insurance Ltd

The case of BOQ Ltd v Chartis Aust Insurance Ltd involved a dispute between a financial services provider and its insurer over professional indemnity coverage. BOQ Ltd sought indemnity and defence costs from its insurer, Chartis Aust Insurance Ltd, following a claim by a customer regarding the services provided. Chartis denied indemnity, citing an exclusion clause in the policy. The matter was brought before the court to determine whether the policy responded to the claim for indemnity and defence costs, and if the exclusion applied to cover for defence costs.

The primary legal issues for the court to resolve were the interpretation of the insurance policy, particularly the exclusion clause, and whether declaratory relief should be granted in advance of determining BOQ’s liability to the claimant. The court needed to ascertain whether the exclusion clause precluded coverage for the defence costs and whether declaratory relief was appropriate given that the insurer had not accepted the facts of the claim and BOQ was contesting the claim.

The court found that the exclusion clause did not apply to the coverage for defence costs, thus the policy did respond to the claim for defence costs. However, the court also determined that declaratory relief was not appropriate in these circumstances because the insurer had not accepted the facts of the claim and BOQ was contesting the claim. Consequently, the application for declaratory relief was dismissed, and the applicant was ordered to pay the respondent’s costs of the application.