Australia Policyholder Insurance Highlights – 10th Edition

• AI and the emerging risk landscape: the most talked about topic in insurance and legal risk this year has undoubtedly been the emergence, and increasing sophistication, of AI technology. In this edition, we explore the risks and opportunities associated with AI, the potential exposures it may give rise to and the role insurance has to play in managing the risks.
• A growing body of LEG defects cases: internationally there is now a growing body of case law in relation to the LEG defect clauses used to exclude costs relating to defects in Contract Works/ Construction All Risks insurance policies. In light of several recent cases (particularly in the United States) we have brought together a summary of the law and recent developments for those with an interest in this area.
• Directors’ & Officers’ insurance market continues to recover: despite an uptick in regulatory focus on director/officer misconduct relating to reporting on environmental sustainability (and ESG generally) and a continued emphasis on technological and operational resilience (including cyber resilience), the market for D&O insurance continues to soften in line with recent trends. Premium reductions and enhanced coverage do not appear to be a function of an actual or perceived reduction in class action or director risk, but rather changing insurance market dynamics as new entrants to the market continue to compete for premium and market share.
• Construction claims on the rise: consistent with the significant amount of infrastructure and construction investment over recent years, professional indemnity, contract works and general liability claims have been a major feature in 2024 as borne out in various case summaries in this edition. The issues of policy interpretation raised in a number of these recent decisions are highly topical and include important lessons for policyholders, brokers and claims advisors operating in these areas.

We hope that you find this year’s edition of Policyholder Insurance Highlights insightful.

Please contact a member of our Insurance team (details below) if you would like to discuss any of the cases or trends and how they may impact your business.