Todd v Alterra at Lloyds Ltd (on behalf of the underwriting members of Syndicate 1400) (No 2)

In the matter of Todd v Alterra at Lloyds Ltd, the dispute between the parties centred around the interpretation and application of a Financial Services Errors and Omissions Insurance Policy. The case was heard in the Supreme Court of New South Wales. The central issue revolved around whether the insurance policy in question provided coverage for certain liabilities claimed against the insured, Mr Todd, and the extent of the insurer’s obligation to indemnify Mr Todd.

The legal issues before the court included whether the insurance policy responded to the claims made against Mr Todd, the extent of the insurer’s duty to indemnify Mr Todd for those claims, and the quantum of defence costs. Additionally, the court had to determine the appropriate costs to be awarded in the proceedings. The appellant argued that the insurance policy provided coverage for the claims against him and that the insurer was obliged to indemnify him fully, including his defence costs. The respondents contended that the policy did not respond to the claims and, if it did, the extent of the insurer’s obligation was limited.

The court found in favour of the appellant, ruling that the insurance policy did indeed respond to the claims against Mr Todd. It held that the insurer was obliged to indemnify Mr Todd for his liabilities to the applicants, his defence costs, and his liability to pay the applicants’ costs, subject to any applicable excess and Self-Retained Aggregate. The court set aside the previous orders and made new orders that reflected these findings, including the payment of specific sums by the insurer to the applicants and the insured, and the referral of separate questions for further hearing. The appeal was allowed with costs.