FAI General Insurance Co Ltd v Gold Coast City Council

The case of FAI General Insurance Co Ltd v Gold Coast City Council involves a dispute between an insurance company and a local council. The council was successfully sued for a negligent misstatement regarding the position of a water main. The core question before the court was whether the conveyance of factual information by the council included any professional component, thereby triggering the council's duty to provide correct information under the terms of the professional indemnity policy held by the plaintiff.

The legal issues addressed by the court encompassed the extent of the council's duty when providing factual information and whether this duty was subject to professional indemnity insurance. The court had to determine if the council's provision of information was imbued with a professional element, thus falling within the scope of the insurance policy. The court also needed to clarify whether the negligent misstatement claim related to an act that was professional in nature.

The court found that the council's duty to provide accurate information about the position of the water main did not involve a professional component. The provision of factual information was considered a straightforward task, without the requisite professional skill or judgment that would engage the professional indemnity policy. Consequently, the court ruled that the insurance company was not liable to cover the council's liability for the negligent misstatement. The court's decision hinged on the distinction between the provision of factual information and the exercise of professional judgment or skill.