{"id":1610,"date":"2025-04-15T09:37:38","date_gmt":"2025-04-15T08:37:38","guid":{"rendered":"https:\/\/fenchurchlaw.com\/en-uk\/?p=1610"},"modified":"2025-04-15T09:37:38","modified_gmt":"2025-04-15T08:37:38","slug":"win-for-policyholder-in-triple-insurance-case","status":"publish","type":"post","link":"https:\/\/fenchurchlaw.com\/en-uk\/win-for-policyholder-in-triple-insurance-case\/","title":{"rendered":"Win for policyholder in triple insurance case"},"content":{"rendered":"

Watford Community Housing Trust v Arthur J Gallagher Insurance Brokers Limited <\/em>[2025] EWHC 743 (Comm)<\/p>\n

In a judgment favourable to policyholders delivered on 8 April 2025, the Commercial Court upheld a policyholder\u2019s right to choose on which policy to claim where cover was provided under multiple policies. The Court also confirmed that, where insufficient cover is provided by an individual policy, the policyholder may claim sequentially under two or more policies.<\/p>\n

Background<\/strong><\/p>\n

The Claimant was responsible for a serious data breach, the financial consequences of which were covered under three separate insurance policies arranged by the Defendant broker (a Cyber Policy, a Combined Policy, and a PI Policy, which contained indemnity limits of \u00a31m, \u00a35m and \u00a35m respectively).<\/p>\n

Each Policy contained an \u2018Other Insurance\u2019 clause, which provided that, where multiple policies covered the same loss, the Policy would only cover losses in excess of those covered by the other policy.<\/p>\n

Following the breach, and on the Broker\u2019s advice, the Claimant notified the Cyber Insurer but not the Combined or PI Insurers, resulting in late notification. The Combined Insurer eventually affirmed cover despite this; but the PI Insurer maintained a declinature, and it was common ground that it had been entitled to do so. As a result, the Claimant had \u00a36m of available cover under the Cyber and Combined Policies.<\/p>\n

The Broker subsequently accepted that its advice had been negligent.<\/p>\n

As its losses arising from the data breach exceeded the \u00a36m of available cover, the Claimant sued the Broker, alleging that but for its negligence, the Claimant would have been entitled to a total indemnity of \u00a311m (being the sum of the indemnity limits of all three policies).<\/p>\n

The Broker\u2019s position <\/strong><\/p>\n

The Broker argued that the maximum total indemnity to which the Claimant would have been entitled, even absent its Broker\u2019s negligence, was the maximum liability under any one Policy, i.e. \u00a35m. The Broker further argued that, since the Policyholder had already received \u00a36m from the Cyber and Combined Policies, it had suffered no loss in not being covered under the PI Policy, as it had already recovered more than the maximum indemnity to which it would have been entitled.<\/p>\n

In support of its case that the maximum recoverable indemnity was only \u00a35m, the Broker submitted, and the Court accepted, that the \u2018Other Insurance\u2019 clauses in each of the Policies all cancelled out one another. \u00a0Accordingly, argued the Broker, this was a case of triple insurance where the Policies provided primary cover for \u00a31m, \u00a35m and \u00a35m respectively.<\/p>\n

The Broker then argued that. in such a case of triple insurance, a general principle of ratable contribution applied, such that the maximum indemnity to which the Claimant was entitled was the maximum liability under any one policy. As a result, each Insurer\u2019s liability would be limited to an equitable proportion of that capped liability. For example in the current situation,\u00a0 the Cyber, Combined and PI insurers would each be liable for one-third of the first \u00a31m of the Claimant\u2019s loss, and (ii) the Combined and PI insurers would each be liable for one-half of the next \u00a34m of the Claimant\u2019s loss, such that the Claimant would be entitled to \u00a3333,333, \u00a32,333,333 and \u00a32,333,333 from the Cyber, Combined and PI Insurers respectively – ie, a total of \u00a35m.<\/p>\n

In addition, the Broker had an alternative argument that, since the Policies were worded such that none of the insurers had agreed to provide primary coverage when another primary policy existed, effect should be given to that intention, by limiting the total indemnity available to the maximum indemnity under any one policy, thus reducing each individual insurer\u2019s liability.<\/p>\n

Decision<\/strong><\/p>\n

In finding for the Claimant, the court held that, contrary to the Broker\u2019s principal submission (which the court said had been mistakenly based on cases involving claims between insurers) ,there was no general principle of rateable contribution in cases involving double (or triple) insurance whereby a policyholder\u2019s indemnity was capped at the highest limit of any one policy. Further, the policyholder could choose the order in which to claim under the available policies, and, if it failed to recover the whole loss from one, it could recover the balance from the other(s). It would then be a matter for the insurers to establish contribution between themselves.<\/p>\n

In addressing the Broker\u2019s alternative argument that the wording of the policies operated to restrict the total indemnity to the highest single limit, the Court accepted that the general proposition that the wording of the policies could have displaced the usual rule outlined above, but held that, as a matter of construction, that was not the effect here.<\/p>\n

As the Judge explained:<\/p>\n

\u201cIt seems to me that if an insured has paid more than one premium for more than one primary policy against liability incurred above a specified attachment point and up to a specified limit, absent an express contractual provision that provides otherwise, as a matter of general principle the insured should be able to recover the whole of its loss under one or more of the policies up to a maximum of the combined limits. Contribution, if it arises, is a matter for the insurers inter se and absent a rateable proportion clause in the policy is of no concern to the insured<\/em>\u201d.<\/p>\n

The Broker was therefore liable for the Claimant\u2019s losses which subsisted after payment by the Cyber and Combined Policies, subject to the limit of indemnity under the PI Policy.<\/p>\n

The full judgment can be read here:<\/p>\n

https:\/\/www.bailii.org\/ew\/cases\/EWHC\/Comm\/2025\/743.pdf<\/a><\/p>\n

Authors\u00a0<\/strong><\/p>\n

Jonathan Corman, Partner\u00a0<\/a><\/p>\n

Eugene Lee, Senior Associate\u00a0<\/a><\/p>\n

Matthew King, Associate (Foreign Qualified Lawyer)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Watford Community Housing Trust v Arthur J Gallagher Insurance Brokers Limited [2025] EWHC 743 (Comm) In a judgment favourable to […]<\/p>\n","protected":false},"author":70,"featured_media":1612,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[296],"class_list":["post-1610","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-property-risks"],"acf":[],"yoast_head":"\nWin for policyholder in triple insurance case - Fenchurch Law UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fenchurchlaw.com\/en-uk\/win-for-policyholder-in-triple-insurance-case\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Win for policyholder in triple insurance case - 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