Todd v Alterra at Lloyds Ltd

In the case of Todd v Alterra at Lloyds Ltd, the dispute involved the interpretation of a financial services errors and omissions insurance policy. The primary issue before the court was whether the policy, issued by Alterra at Lloyds Ltd, provided coverage for errors or omissions made by Todd in the performance of his professional services, which included financial planning advice on approved investment products and life insurance products. The court also had to determine the meaning of the terms “approved investment products” and “encompassing” in the context of the policy, and whether liability was restricted to financial advice given on investment products listed in an “Approved Product List.”

The court found that the primary judge had erred in giving the terms a narrow construction. It held that the insurance clause covered all aspects of financial planning as long as the planning contained advice on approved investment products, which were products that were approved by the licensee from time to time. The court further held that the doctrine of strictissimi juris, which requires any doubt in the construction of an insurance policy to be resolved in favour of the insured, did not apply in the same way to insurance policies as it does to contracts of guarantee and indemnity. Insurance policies have a different purpose and possess different characteristics that distinguish them from such contracts.

The appeal was allowed, and the orders included setting aside the dismissal of the cross-claim, declaring that the insurance policy responded to the claim against Todd, and ordering the respondents to indemnify Todd for the liabilities identified. Additionally, the court ordered that the respondents pay Todd's costs of the proceedings on the cross-claim. The court also referred certain questions for further hearing, and invited submissions on the form of order from the parties if desired.