whether “Difference in Conditions” (Other Insurance) clause operates to deny indemnity in respect of same liability
Quick Take
1Where a 'Difference in Conditions' clause in a liability policy uses the term 'Named Insured' but its application only to that class (rather than all 'Insureds') produces a commercially absurd result — placing Named Insureds in a less favourable position than broadly defined third-party Insureds and exposing the insurer to unassessed risk — the court may construe the clause as applying to all Insureds, treating the use of 'Named Insured' as an obvious drafting error correctable by construction.
2A contractual 'Uniform Meaning' clause permitting departure from a defined term where its meaning is 'clearly inapplicable' in context may provide a broader basis for departing from the ordinary meaning of defined terms than the general law principles governing correction of drafting errors, and can operate as an independent ground for context-specific construction.
3In a construction industry liability policy, a schedule entry extending 'Named Insured' status to 'all contractors and sub-contractors and other parties as required by contract or agreement' is properly construed as limited to those for whom another Named Insured is contractually required to obtain insurance as a named insured, not merely as an insured simpliciter, having regard to the structure of the policy's definitions and common industry practice.
