Insurance Law: Appeal court says sum insured includes EQC payments

In Zurich Australian Insurance Ltd v BC398983 & anor [2013] NZCAS 560 the Court of Appeal allowed Zurich’s appeal from a High Court decision about earthquake damage to the Salisbury Park Apartments.  Reinstatement would cost $25M.  EQC had paid the statutory maximum of $6.8M.  However, the insurance policy had a sum insured of $12.95M.  The High Court decided that by virtue of the wording of the insurance policy the insured could recover $12.95M under the insurance policy in addition to the $6.8M from EQC.  The Court of Appeal said that this interpretation of the insurance policy was wrong.  Zurich’s liability under the insurance policy was net of EQC cover, so its liability was only $6.15M.