EQC – top up


In the recent High Court decision in Body Corporate 398983 v Zurich Australian Insurance Ltd & anor [2013] NZHC 1109 the Court had to interpret the applicable insurance policy as to whether the sum insured in the insurance policy of $12.95M included the amount due from EQC of $6.8M.  It was relevant because the total loss was about $25M plus GST.  The body corporate said that it was entitled to $19.75M total ($12.95M (Zurich) plus $6.8M (EQC)).  The insurer said the liability was $12.95M ($6.8M (EQC) plus $6.15M (Zurich)).  The relevant insurance policy clause provided “the insurers liability will be limited to the amount of loss in excess of the EQC cover”.  Because the loss exceeding the EQC cover was more than $12.95M ($25M-$6.8M) the body corporate was entitled to the sum insured of $12.95M plus the $6.8M from EQC.