Sphere Healthcare Pty Ltd v Allianz Australia Insurance Ltd

[2026] NSWSC 579

Supreme Court of NSW

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Interrogate

Catchwords

1. INSURANCE — insured manufactures health care products and infant formula — COVID-19 pandemic — insured decides to make hand sanitiser — insured also seeks industrial special risks (ISR) policy with $26.8 million limit of indemnity — insured imports bulk ethanol, exceeding capacity of dangerous good area — ethanol placed next to factory — fire — total loss — whether insured entitled to indemnity.

Quick Take

The Court held that the insured's ISR policy was not cancelled by the former broker's unilateral instruction to the insurer, as the broker lacked authority to cancel the policy where the insured intended only to transfer it to a new broker. However, the subsequent issuance of a new policy schedule and wording constituted a variation (or new contract) triggering a fresh duty of disclosure under s 21 of the Insurance Contracts Act. The insured failed to disclose its plans to manufacture hand sanitiser and import bulk ethanol, and the insurer was entitled to reduce its liability to nil under s 28(3) and refuse the claim under s 54(2), as the non-disclosure was material and the policy endorsements for inadvertent non-disclosure and alteration in risk did not assist the insured on the facts.